We will have to send Best Buy a 1099
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.”
Log in to reply.