Thursday, May 06, 2010
Standby, small businesses, for the paperwork explosion hidden in the health law
by Larry Geller
There’s a hidden bomb in Congress’ health insurance reform bill. It’s brought to you not by a terrorist, but by your government at work. It’s a paperwork bomb.
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 in a tax year.
the nature of 1099s and means businesses will have to issue millions of new tax documents each year. [CNNmoney.com, Health care law's massive, hidden tax change, 5/5/2010]
Buy a computer from Costco? Better get their tax number, etc., at the time you buy it.
The article mentions that there is action to repeal this. If you own a small business, it might be good to read the full article and find out how to support the repeal.
I'm a small business owner and almost all of my vendors, other than CostCo and Office Max and other little guys like me have their TIN on their invoices and receipts. If someone keeps books on their computer (for a $150 program like Quick Books), the form generation is done in an automated fashion by the computer. The only real problem here is the mailing costs of the 1099s. Of course, that cost would be a business expense and itself not taxable. The upswing is that people would have to keep clear and honest books which for people like Sam Slom is unAmerican. For him and other right wing nutters, business should have the freedom to cheat taxes. I think for people who run small businesses that keep honest books this is not a big deal.
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