President Obama signed the repeal into law on April 14.
It repeals reporting requirements that were scheduled to take effect in 2012. The law also revokes new reporting rules for rental property landlords.
Here’s the whole story: A business would have been required to report on Form 1099 compensation (e.g., commissions, fees, etc.) paid to an individual, such as an independent contractor, or an unincorporated business if the annual amount was $600 or more.
But these reporting rules generally would not have applied to payments made to a corporation. Also, a business would not have been required to issue 1099s when it purchased goods.
Under the 2010 health care legislation, the 1099 reporting exemption for corporations was set to expire after 2011. Accordingly, if a business paid more than $600 to a company for providing services in 2012, it would have been required to report the payment on Form 1099. The same rule would apply to rent payments to a corporate landlord and payments for goods or gross proceeds (e.g., payments to law firms).
Now the new law flat-out repeals this provision. It’s like the reporting requirements never existed.
Similarly, new 1099 reporting rules for landlords were scheduled to take effect in 2012. Under the 2010 Small Business Jobs Act, rental property owners must report payments for services relating to their properties if the provider received $600 or more annually beginning in 2011.
This requirement was extended to payments for goods by the health care legislation. The new law also wipes these reporting rules off the books.
Tip: The repeals are funded by a technical change increasing tax for certain taxpayers receiving premium assistance credits in 2014.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/14551/obama-signs-business-1099-reporting-repeal "