GET READY FOR THE FORM 1099 sink hole!
Are you prepared for the implementation of the various sections of the Obama health care bill in 2012?
I fail to see what this has to do with "health care", but that is a good way to bury an onerous new regulation and this one is Draconian and onerous.
THE GOVERNMENT HAS DISCOVERED A TREASURE CHEST OF TAXES $$$$$.
"Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services." More. . .
Did you spend $600 or more to any vendor, supplier, service provider, etc.???
First, the definition of the term "person" as it is used to describe the recipients of payments covered by the reporting rules was modified to include "any corporation." The only exception to this rule are corporations that are tax exempt under Code Section 501(a), which includes all 501(c) organizations. The second change added the phrase "amounts in consideration for property" to the type of payments that are reportable on a 1099. More. . . .
FORM W-9. In simple language, this short, little publicized section in the health care legislation would require all business owners in the U.S. THAT INCLUDES:
- Real Estate Agents
- Real Estate Brokers
- Home Inspectors
- Termite Inspectors
- Property Managers
The law covers anyone in the housing industry who files a tax return and expects to deduct the cost of equipment and services purchased in connection with the operation of their business.
Just think of the deductions we track to manage our business:
- Office Supplies
- Copy Services
- Personal Services in connection with your business
- You name it
What about Capital Assets??? Will the 1099s go out for this category when acquired or year after year as they are expensed??? Dang if I know. Thank goodness my accountant will know, for sure.
THIS SECTION OF THE HEALTH CARE BILL has generated little discussion in the media. I've heard a few reviews of it, but just focused on it today.
I also heard that a member of Congress is planning to present a bill to elete this onerous provision from the law. Let's hope he succeeds.
Frankly, I don't believe it will work. Unless many small businesses restrict dramatically what they buy, where they buy and how they conduct their business this Draconian record keeping burden will cause many small business filers to file short forms, not take advantage of the Schedule C deductions and have far less capital with which to operate their business.
GEEZ! Based on the $600 Trigger, I'll have to get a Form W-9 and send a 1099 to ActiveRain.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.
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