Okay, first of all this new form tax requirement was in the Health
Reform Bill that passed and will not start until 2012.
Second, the IRS now has to weed thru this and write the new
rules/regulations for the new law that Congress passed.
It is very confusing, and we will get more info as IRS figures out
what to do. But what it looks like, is anything a small business
purchases over the amount of $600.00 per year, the small business
owner will have to file a 1099 form for the vendor(the companies we
use to purchase our supplies, rent, utilites)
They give an example of if you, thru out the year, spend over $600.00
at Staples, then you would have to get the Fed Tax Id number from
Staples and fill out the 1099 form, send Staples a copy, and then
send irs copy. They also give the example of your phone bill, utility bills.
In our life, our booth rent would be under this, and any of you that
spend 600.00 at any one location. I am assuming our local suppliers
would follow under this. Jeez, I wonder if all the paper towels,
coffee and sodas, cleaning supplies at my local grocery store would
include this??? Do I need to file a 1099 form for my local grocery store?
QUOTE----------"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.""----------------UNQUOTE
Many advocate groups are saying this is way too much paper work, and
many companies said, well, I will cut down who I purchase products
from, so I don't have to fill out so many 1099's forms. Which will
hurt some small businesses because larger vendors will stop using
small business to save on the paper work issue.
(I have filled out the 1099's, not fun, more paperwork for all of
us), and the hassle of getting everyone's federal tax id number, well
that will be odd.
Congress says it will increase income of up to 300 billion dollars
per year. Some advocate groups say no.
It did say as of now it will NOT include credit car transactions, so
if we pay by credit card then we wouldn't have to file a 1099 form,
which would take care of all supplies we purchase from one vendor
over the internet or phone.
Also, starting in 2011 all credit card companies (the companies we
use to process our clients purchases) will report all purchases to
the IRS, but the company must have atleast $200,000.00 in
transactions, 200 transactions.
You read thru this and see what you come up with. This will be a
major change for all of us. Three links below. Just for your
Info. diana from indiana
http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/index.htm?postversion=2010050523
http://money.cnn.com/2010/05/21/smallbusiness/1099_deluge/index.htm?postversion=2010052113
http://money.cnn.com/2010/07/09/smallbusiness/irs_1099_flood/
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