A business peer read our articles on Health Care Reform in the May Biz2Biz and was prompted to share news she'd uncovered. What she shared blew me away. Here's the 411:
Hidden in the HCR Bill is a teeny weeny section that says that beginning in 2012 all companies will be required to issue 1099 tax forms to any individual or corporation from which they buy more than $600 in goods or services in a tax year.
So let's put this is perspective. You buy an iMac from the Apple store for $1,000. Now you have to send Apple a 1099. Buy $650 worth of paper towels from a B2B distributor? You'll send them a 1099, too. Shop at Office Depot for your office supplies? You'll have to send them a 1099. Spend more than $600 on your merchant services? Yep, put them on your list, too. All those B2B luncheons you attend, you'll be sending both the Chamber and the hotel 1099s.
The story was reported in CNNMoney.com and went on to say that one of the reasons this tax code revision landed in the HCR was government's way of recapturing unreported income -- and maybe that will offset the cost of the health bill.
We reported in the Money Issue of Biz2Biz in February about the IRS looking at "tax gaps." The Feds believe there is $345 billion in unreported income going untaxed. They also surmise that if small business is going to get health care tax cuts, we're going to have to make it up for it somewhere else.
There are so many ways to peel this peach I don't know where to begin. Aside from the sheer nightmare of adding reams of paperwork we, as small business owners, don't need this tops my list of the most ridiculous things people think of. There's a TV show on True TV that this would fit right into-- "America's most stupid rules."
Is government securing its own destiny by giving itself more work? Will it cost more to administrate this code than they will gain in tax revenue? Is government in the throes of a black hole, about to collapse upon itself and suck everything with it?
OMG! What do we do about this?
Read the full article at CNN Money.
Thursday, May 6, 2010
Subscribe to:
Post Comments (Atom)
Janie,
ReplyDeleteWhat concerns me the most about this is not only how it will affect consumer purchases, but what it will do to those of us who have deductions for a home office or even a brick and morter business. Does this mean if we exceed $600 in expenses that we will be sending 1099's to our landlords/mortgage holders, utility providers, insurance providers, etc.?
While I am all for cutting down on illegal deductions, the ramifications of this legislation is chilling. Lets hope that there are some realistic changes before 2012 to this piece of the health care reform "pie".
Janet, thanks for the further insight. I so appreciate you bringing this whole issue to my attention. Now if we can just get ALL our small business colleagues to stand up and and say, No, we can't!
ReplyDelete