The Senate voted to approve a repeal of the Form 1099 tax-reporting requirement that was included in last year's health care law that is expected to create a paperwork nighmare for small businesses.
The proposal would require the Office of Management and Budget to find a way to fund the change. In addition, as expected, a Senate proposal by Senate Minority Leader Mitch McConnell, R-Ky., to repeal the full health care law was defeated along party lines, a vote that McConnell characterized as "just the beginning."
Baring repeal, starting in 2012, businesses of all sizes (there is no small business exemption) must start to report payments for goods and services of $600 or more. This provision was added in an attempt to bring the projected cost of Obamacare in under $1 Trillion Dollars over 10 years. It is not only doubtful that it will do what it is intended to do, It creates an administrative nightmare in the process!
Small business owners will have to track payments to all firms you do business with, obtain their tax identification numbers, and then issue them a 1099.
Although the Senate Action is welcome the House must still pass a bill repealing the rule and then the President would have to sign it for its total repeal to take effect.
Businesses should get ready for this reporting rule in the event that it is not repealed.
Businesses should get ready for this reporting rule in the event that it is not repealed.
Here are three new 1099 rules that could affect you and your business. Read More
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