Prepare for the blizzard – the health care bill contains new 1099 requirements. Until now, a business did not have to file a 1099 if the payment was to a corporation or if the payment was for goods – the prior reason for the 1099 misc was to identify people pretending to be a business but not reporting income.
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The 1099 changes require a business to report all transactions of $600 or more in a year – basically telling the government through the mechanism of every significant business transaction – how much was your phone bill, your power bill, how much did you pay your CPA, which retailer did you buy your PC from, how much rent did you pay, etc…
Another similar change tacked on a different bill requires credit card processors to report the amounts paid to merchants. If you’re running a store on eBay and getting paid via Paypal and not reporting income, your time is up.
I look forward to the train wreck- it’s long overdue. These new requirements will cause the income tax system to collapse under its own weight of bureaucracy. Can you imagine how many 1099 mistakes will be made every year by Wal-mart and K-mart shoppers who are trying to report the purchase of business items? Who will be responsible for reconciling the errors? The buyer or the seller? Finally, think about how corporate identity theft will increase once the Federal Tax ID numbers for all goods and services providers become as well known as “msn.com”.
Does anyone need any further evidence that the people writing laws in Wash D.C. are complete morons? Mom & pop small business will simply have to ignore these new regulations and challenge the feds to throw all business owners in jail. There just aren’t enough hours in the year to comply with these types of reporting requirements.
My friends think I am kidding when I tell them I have to listen to meditation tapes and say the Rosary to keep sane. I started a business on May 21 2009, built a building and everything – jee willikers – The social contract was dissolved some time ago – maybe Beck is right – we might see fissures in the social structure by Christmas. It’s not just the parasite losers in Washington DC, Albany, Harrisburg or Sacramento – its the useless zoning prick that wants be to move a half dead bush six inches !!! and so on and so on. I hear the seminar callers to Rush’s show calling up saying that the 9-5 government parasites are just like you and I – not a shot in hell buddy boy.
Or course, before the payor can file a 1099, they first have to have the payee fill out the W-9 form so the payor has on file a copy of the information supplied, so they can show in good faith that they thought the Tax ID was proper and the payee is not subject to backup withholding.
So I walk into Staples and want to buy a new office chair, I have to hand someone the W-9 form (or more likely the store will have a stack of them ready)… when I complete the transaction, I store away the W-9 form so that in January, my accountant (or I) can file the 1099-Misc with the IRS and send a copy to Staples’ World Headquarters.
How can the IRS do all of this paperwork.?…. Of course! The Federal govt. hires tons of IRS workers to look over YOUR shoulder to see everything you do with YOUR money.
Hmmmmmmm………interesting.