Someone just sent this to me and I figured I'd pass along the good news since many on here are small business owners and sole proprietors. It doesn't take effect until 1/1/2012, but it's something to prepare ourselves for.
Here's the link to the story: http://money.cnn.com/2010/05/21/smallbusiness/1099_deluge/index.htm
But here's the important part...
Until now, payments to corporations have been exempt from 1099 rules, as have payments for the purchase of goods.
Starting in 2012, that changes. All business payments or purchases that exceed $600 in a calendar year will need to be accompanied by a 1099 filing. That means obtaining the taxpayer ID number of the individual or corporation you're making the payment to -- even if it's a giant retailer like Staples or Best Buy -- at the time of the transaction, or else facing IRS penalties.
In essence, the 1099-Misc is having its role changed from a form for tracking off-payroll employment to one that must accompany virtually any sizeable business transaction.
"Just with business travel it would include hotels, rental cars," Henschke says. "Phone service: 1099. Computer service: 1099. Whoever does your postage meter: 1099. You do a little advertising, Yellow Pages: 1099. Your landlord: 1099. You might as well just keep them in your pocket and hand them out as you go around every day."
Yep, part of "health care".
I may have just turned this to a political thread but business and politics are seldom separated by a great distance. You might say that the line is "coincident with" not "adjacent".
madness..
Apparently negotiations are ongoing to eliminate or scale back this requirement....
"In the Senate, the latest incarnation of Majority Leader Harry Reid’s small-business jobs bill, proposed late Thursday night, offers his colleagues a choice: they can vote on an amendment by Republican Mike Johanns of Nebraska to repeal the new requirement, or they can vote for a Democratic alternative that scales it back. (Of course, individual senators could also vote to do both or to do neither.)
The Democrats’ measure would raise the threshold for reporting goods purchased to $5,000 from $600 and would exempt businesses with 25 or fewer employees from the requirement altogether. It also excludes purchases made by credit card, because these will be reported separately by credit card payment processors under a different law that takes effect in January. These revisions, according to a Finance Committee aide, would likely cost the Treasury $10.1 billion in lost revenue.
Both amendments, however, come with a poison pill that will be tough for members on the other side to swallow. The Johanns amendment is paid for with money from health care programs created by the reform law, while the Democratic proposal is offset by eliminating an income deduction for the five largest oil companies. With each side making offers the other cannot accept, it is difficult to predict where repeal will end up."
Rick