New 1099 Requirements affect MANY Businesses

Buried in the New Health Care Reform bill is a update to the 1099 filing requirements. 
Beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.  This is going to create a real accounting nightmare.  If your Local CPA hasn't updated you, you should start to obtain vital information that will be needed to prepare your 1099s. 

Currently, there is no requirement to file a 1099 to businesses that you buy more than $600 in goods.  That is a major difference.  For example, If your business buys a computer from Dell for $1000, you will need to 1099 Dell according to the new tax code.  The objective here is to close the tax gap, but the consequence is going to be increased cost to small businesses who now need to prepare more 1099s than they have in the past. 

These changes do not apply to individuals.  So if you the individual pay your Staten Island CPA , in excess of $600 for estate planning; you will not need to prepare a 1099.

Under the new law, the threshold is $600.  If your business pays over $600 to an individual or business for goods or services, you will need to issue a 1099.  Get started early and collect the information you will need.

Name
Address
and EIN # (Employer ID #) or SS # (Social Security)

If you have any questions about this or need help in planning on how to keep track of the required information.  Contact my office at 718-227-6035, David C Egan, CPA.