Archive for January, 2011

The Senate voted on February 2nd to repeal the 1099 reporting requirements.  Now, the House must vote.  This is good news, as this would have created a paperwork nightmare!

The new 1099 requirements are part of Health Care Reform. In the 2000 page document, someone decided to insert this language and viola, here we are with a law that does not make sense for most day-to-day services we receive; i.e., Staples, Costco, etc. These are large firms that we all do business with. What I think the law was pushing for was to provide the government with documentation for those smaller vendors who are perhaps contract labor, sole proprietors and sometimes do not use proper tax reporting.

The law has gone back for appeal now twice, but at this point nothing has changed in the law other than it has been moved to 2012.

In 2012, a 1099 form will be required to all vendors making $600 or more. The new 1099 ruling applies to both individuals and businesses.

The government hopes the changes in 1099 reporting will generate additional tax revenue on income that has previously gone unreported. This part of the law is in the Health Care Reform bill because that revenue could potentially pay for some of the bill’s potential costs.

We think every business/individual should be prepared and begin setting up their books, but Congress may have more conversations about the amount of paper this will generate and additional staff hours to handle this reporting process. Some of the provisions just do not make sense!

We will keep you updated on pertinent information as it comes up. Several of the provisions have already been moved back, and we hope the government powers will continue to do this until they have a law that makes sense!

“Small enough to know you; large enough to serve all your benefit needs”

Jacquie Healy

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