Starting in 2012 - More 1099 Requirements

Starting In 2012 - More 1099 Requirements

Buried in the new health care bill is a mandate that begins in 2012, and will require all company's to issue 1099 forms not just to contract workers but to any individual or corporation from which they pay out more than $600 in goods or services in a tax year.                                    

Check out this article in CNNMoney, explaining how these new requirements may affect how you do business starting in 2012.

This health care bill mandate, intends to collect lost revenue from companies that under-report on their tax returns.  This change is expected to raise $17 billion over 10 years.

For the first time, 1099s are to be sent to Corporations according to Chris Hesse, director of taxation at CPA firm LeMaster Daniels, PLCC in Washington State, as quoted by Chris Edwards in a Cato Institute blog.  "This is a huge new imposition on American business, costing the private economy much more than any additional tax that the IRS might collect as a result."

In order to file the required 1099, a business would have to get a Taxpayer Information Number from the vendor and under current law one copy of the form is sent to the IRS and another copy is sent to the person to whom the business made the payment.

Julie