Doing commercial accounts? You'd better read this!

Discussion in 'Business Operations' started by Richard Martin, May 2, 2010.

  1. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    A little blurb was added to the Health Care Bill. It was intended to help pay the cost of the program.

    1099 Mandate From Hell Slipped into Health Bill

    The CATO Organization is noting Costly IRS Mandate Slipped into Health Bill

    In a recent summary, tax information firm RIA notes the types of transactions covered by the new 1099 rules...

    Basically, businesses will have to issue 1099s whenever they do more than $600 of business with another entity in a year. For the $14 trillion U.S. economy, that’s a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS.

    Tax CPA Chris Hesse of LeMaster Daniels tells me:
    Under the health legislation, the IRS could be receiving billions of more documents. Under current law, businesses send Forms 1099 for payments of rent, interest, dividends, and non-employee services when such payments are to entities other than corporations. Under the new law, businesses will be required to send a 1099 to other businesses for virtually all purchases. And for the first time, 1099s are to be sent to corporations. 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.
    The Air Conditioner Contractors of America said:
    The House bill would extend the Form 1099 filing requirement to ALL vendors (including corporate) to which they pay more than $600 annually for services or property. Consider all the payments a small business makes in the course of business, paying for things such as computers, software, office supplies, and fuel to services, including janitorial services, coffee services, and package delivery services.

    In order to file all these 1099s, you’ll need to collect the necessary information from all your service providers. In order to comply with the law, you would have to get a Taxpayer Information Number or TIN from the business. If the vendor does not supply you with a TIN, you are obligated to withhold on your payments.
  2. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Pajamas Media?

    Heck I can write news like that!

    Guess I'm not the only one anymore.
  3. rjh4758

    rjh4758 LawnSite Member
    Posts: 220

    Every time we buy a mower off craigslist that is over $600 we will have to send a 1099 to the seller? WOW this should get fun because no one will want sell anything private to us anymore because they will have to claim it on their taxes. I guess no 1099 no deduction off you taxes either.

    Not sure how this will work with fuel. I buy over $600 in fuel but not at once but over the year. Imagine the look on a tellers face when you ask for a receipt and a 1099.
    Last edited: May 2, 2010
  4. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    Google it Chucklehead. It's real.
  5. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    Nevermind. The admins moved this post to some obscure part of Lawnsite. No one will ever see it now.

  6. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

  7. we sure do like to bury stuff in paperwork in this country.
  8. Frontier-Lawn

    Frontier-Lawn LawnSite Silver Member
    Posts: 2,949

    how to get around it, buy it personaly and rent it back to the company for $450 per month problem solved
  9. jsf343

    jsf343 LawnSite Bronze Member
    Posts: 1,767

    hope and change people.

    another large government footprint right across your back. It is too bad because this is going to be one big nightmare for any business.
  10. lilweeds

    lilweeds LawnSite Senior Member
    Posts: 595

    All the more reason we need to VOTE in November.

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