There’s a “sleeping giant” in the new health care legislation that could turn into a logistical nightmare for small business owners.
Alert: The new law imposes significant new tax reporting requirements starting in 2012. In essence, a business will have to report most payments whenever the total amount paid to the particular payee during the year exceeds $600. This new Form 1099 requirement will cover payments for both goods and services, including payments to corporations.
At least this little-discussed provision doesn’t kick in until 2012. So you still have plenty of time to prepare for the onslaught of new paperwork.
With business putting pressure on lawmakers to modify or repeal the new rules, expect Congress to revisit the issue.
Here’s the whole story: Under current law, a business must report on Form 1099 compensation (commissions, fees, etc.) paid to an individual, such as an independent contractor, if the annual amo...(register to read more)