TAXBILLY Posted September 14, 2010 Report Share Posted September 14, 2010 WASHINGTON (AP) -- The Senate has failed to repeal a tax provision of the new health care law that even the White House isn't happy with. Tucked into the law is a requirement that businesses file tax forms called 1099s for every vendor that sells them more than $600 in goods. Business groups say it would create a paperwork nightmare for more than 40 million companies. The procedural vote was defeated 46-52 and came on an amendment by Sen. Mike Johanns, R-Neb., that would have repealed the reporting provision. But it fell short of a required 60-vote majority. Lawmakers have been unable to agree on how to fill a $19 billion revenue gap from repealing the requirement. The rule goes into effect in 2012. Quote Link to comment Share on other sites More sharing options...
JohnH Posted September 14, 2010 Report Share Posted September 14, 2010 Most of them are probably thinking there's plenty of time to squeeze a few bribes ( oops, I mean campaign contributions) out of lobbyists and maybe do some horse trading on other votes before 2012, so why the rush? Quote Link to comment Share on other sites More sharing options...
jlewis Posted September 14, 2010 Report Share Posted September 14, 2010 According to Notice 2010-51, new reporting requirements apply to payments made after Dec 31, 2011, so starting Jan 1, 2012 everyone start accumulating data to flood IRS. I intend to report all payments, regardless of amount, encourage all to do same. Be extra compliant. Quote Link to comment Share on other sites More sharing options...
taxtrio Posted September 17, 2010 Report Share Posted September 17, 2010 WASHINGTON (AP) -- The Senate has failed to repeal a tax provision of the new health care law that even the White House isn't happy with. Tucked into the law is a requirement that businesses file tax forms called 1099s for every vendor that sells them more than $600 in goods. Business groups say it would create a paperwork nightmare for more than 40 million companies. The procedural vote was defeated 46-52 and came on an amendment by Sen. Mike Johanns, R-Neb., that would have repealed the reporting provision. But it fell short of a required 60-vote majority. Lawmakers have been unable to agree on how to fill a $19 billion revenue gap from repealing the requirement. The rule goes into effect in 2012. Quote Link to comment Share on other sites More sharing options...
taxtrio Posted September 17, 2010 Report Share Posted September 17, 2010 Interesting twist on the 1099 reporting requirement...think about this: to 1099 someone you need either their SS# or EIN#. If you don't have (or can't get) the number then back-up withholding of 20% is required to be w/h from the payment and sent into the IRS... So if ATT or Verizon or whomever doesn't provide their EIN # then I am supposed to w/h 20% and sent to the IRS?? How long will I have phone service if I do that! I understand the IRS is looking for input from us on how to implement this mess. I have clients that commonly pay a lot of their busines expenses on their credit card. But the credit card companies will be issuing 1099's on all money they process for each merchant. So how do they keep from getting the money reported twice? Once from the credit card company, and once from the business that made the purchase. It has been suggested that the rules for implementing this could stipulate that you only 1099 the amounts NOT charged on credit cards! That would eliminate the double reporting; BUT then all business would have to keep their records showing how much they purchased from each vendor AND keep separate totals for credit/debit transactions versus cash/check purchases. I don't see how they will let this stand. Something has to change. The old saying "be careful what you wish for" could apply to this law. Maybe the IRS thought they would like a better way to tract income.. but can they handle all the paper this will create! Hmmmm. Taxtrio Quote Link to comment Share on other sites More sharing options...
taxtrio Posted September 17, 2010 Report Share Posted September 17, 2010 Interesting twist on the 1099 reporting requirement...think about this: to 1099 someone you need either their SS# or EIN#. If you don't have (or can't get) the number then back-up withholding of 20% is required to be w/h from the payment and sent into the IRS... So if ATT or Verizon or whomever doesn't provide their EIN # then I am supposed to w/h 20% and sent to the IRS?? How long will I have phone service if I do that! I understand the IRS is looking for input from us on how to implement this mess. I have clients that commonly pay a lot of their busines expenses on their credit card. But the credit card companies will be issuing 1099's on all money they process for each merchant. So how do they keep from getting the money reported twice? Once from the credit card company, and once from the business that made the purchase. It has been suggested that the rules for implementing this could stipulate that you only 1099 the amounts NOT charged on credit cards! That would eliminate the double reporting; BUT then all business would have to keep their records showing how much they purchased from each vendor AND keep separate totals for credit/debit transactions versus cash/check purchases. I don't see how they will let this stand. Something has to change. The old saying "be careful what you wish for" could apply to this law. Maybe the IRS thought they would like a better way to tract income.. but can they handle all the paper this will create! Hmmmm. Taxtrio Quote Link to comment Share on other sites More sharing options...
JohnH Posted September 18, 2010 Report Share Posted September 18, 2010 Getting the Fed ID#s will not be a problem. If the 1099 filing requirement remains, most companies will just begin providing their W-9 information on their invoices and/or statements, so it will be right there for everyone who needs it. I expect that IRS will approve some sort of boiler plate wording for that info box which will make obtaining a W-9 unnecessary, so nobody will be getting away with holding back 20%. As for the paper flood problem, IRS can fix that as well. They could just require electronic filing of IRS copies of 1099 forms when the number exceeds a certain threshhold (right now it's 250 forms, but that could easily be lowered to 25, 50, 100, whatever, depending upon what suits their fancy). I hope the requirement gets changed, but I don't expect it to happen any time soon. Last week's failed amendment wasn't intended to pass. It was just a trial balloon to get the issue on the table so the trading & payoffs can begin. Congress has plenty of time to get it done, after all the bribes are in place and the proper votes on other issues are traded back & forth. Quote Link to comment Share on other sites More sharing options...
GeneInAlabama Posted September 19, 2010 Report Share Posted September 19, 2010 >>Congress has plenty of time to get it done, after all the bribes are in place<< Be careful John. Big brother might be watching. Quote Link to comment Share on other sites More sharing options...
grandmabee Posted September 21, 2010 Report Share Posted September 21, 2010 Interesting twist on the 1099 reporting requirement...think about this: to 1099 someone you need either their SS# or EIN#. If you don't have (or can't get) the number then back-up withholding of 20% is required to be w/h from the payment and sent into the IRS... So if ATT or Verizon or whomever doesn't provide their EIN # then I am supposed to w/h 20% and sent to the IRS?? How long will I have phone service if I do that! I understand the IRS is looking for input from us on how to implement this mess. I have clients that commonly pay a lot of their busines expenses on their credit card. But the credit card companies will be issuing 1099's on all money they process for each merchant. So how do they keep from getting the money reported twice? Once from the credit card company, and once from the business that made the purchase. It has been suggested that the rules for implementing this could stipulate that you only 1099 the amounts NOT charged on credit cards! That would eliminate the double reporting; BUT then all business would have to keep their records showing how much they purchased from each vendor AND keep separate totals for credit/debit transactions versus cash/check purchases. I don't see how they will let this stand. Something has to change. The old saying "be careful what you wish for" could apply to this law. Maybe the IRS thought they would like a better way to tract income.. but can they handle all the paper this will create! Hmmmm. Taxtrio It also includes debit cards. we are only supposed to report cash and check transactioin on 1099 rest will be reported on 1099-k Quote Link to comment Share on other sites More sharing options...
taxtrio Posted September 23, 2010 Report Share Posted September 23, 2010 Another thought, many businesses are now running checks received through their credit card merchant for "e" processing. These are also being run thru the credit card companies-- so those "checks" would be treated just like a credit/debit transaction and included in the 1099 issued from the credit card processor. Taxtrio Quote Link to comment Share on other sites More sharing options...
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