When hundreds of millions more forms will need to be processed and reviewed it will take more people. It is not that simple, and if you think it is you are incredibly naive. To shoot holes in your example Quickbooks, or any ERP for that matter, does not have the functionality to generate 1099s on goods purchases. Why would they? It has never been required. Furthermore, not all users buy the complete package. Lots of folks do their taxes independently of their GL. Upgrades are not cheap, and lots of people will need to upgrade. Imagine the burden this is going to place on contractors. I wonder how KyleK is going to like having to send Home Depot a 1099 because he bought a few buckets of nails. My taxes are going to be increased regardless of the tens of dollars this burdonsome monstrocity will bring in. What this does is place an incredible burden on every business in America. How far away cab we be from individuals having to send 1099s to wallmart for their groceries? Yes. I have an understanding of the implications of this bill. You clearly do not.
MLU clearly has not ever had to 1099 anyone. It is a pain in the rear. I already do a lot of them but to think of having to 1099 anyone for such a low amount is insane. I can see it adding several hours labor cost to each job. MLU, are you prepared to gather the info and then get the necessary forms (you can't just print them from your computer on regular paper. You have to have the special approved IRS forms) for every serviceman that comes to your house. Replace your water heater, 1099. Have your A/C worked on, 1099. Lawn care, 1099. This is absolutely ridiculous.
Make sure you use multiple different gas stations while you are driving for business. If you tank up at the same one you'd have to 1099 them.
No, not always. That's when workers become more productive. Again who says that they will all need to be reviewed? The IRS does not go over every tax return with a fine tooth comb. Most are given a cursory glance as long as there is nothing to raise eyebrows at. From what I understand 1099's would fill in a lot of holes. Wouldn't that decrease the number of audits and make the IRS more efficient? Just because it's not available right this minute does not mean that it won't be available at all. Tax software if upgraded/updated every year to keep current with changes in tax laws. I fail to see how this would be any different. QuickbooksPro is $200. Upgrades are less. Pretty cheap if you ask me and I am sure that there are other alternatives. So is the $600 cap on individual purchases? If so, wouldn't KyleK just make his purchases for less than $600? How hard is that? *EDIT: Re-Read the article. Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that 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. If KyleK is a successful businessman, then he no doubt has discovered that the ability to adapt and change is key to being successful. He'll also appreciate that the government has found a way to make more money without increasing his tax rates. I guess we'll have to see, but you have failed to articulate this huge burden. Inconvenience maybe, but that's the price of doing business. If I have learned anything in my professional life it's that things never stay the same and those who adapt quicker are the ones who are most successful. That is simply an irrefutable law of business that will not be changing anytime soon. Sometimes what's easiest isn't what's best... I file my own taxes and have since I first drew a paycheck in high school. I have a better than average grasp of tax laws, but I am not an accountant. I will be the first to admit that I am not an expert, but after doing some reading on this change I have yet to see the huge drawback. All I'm saying is that I don't see what the big deal is and all you can come up with is that it's going to be inconvenient for small business owners. I'm sorry, but that's not a good enough reason and certainly not cause for the outrage. You have been given an opportunity to state your case, but have failed to articulate any reason of substance. I hope that we see more debate on this because it's potentially a real big difference-maker for businesses and taxpayers.
Kyle, according to the legislation the IRS will require that you have the tax id information on hand at the time of the transaction. In order to comply with the law, you would have to get a Taxpayer Information Number from the business. If the vendor does not supply you with a TIN, you are obligated to withhold on your payments. It kicks in January 1, 2012 so there is a good period of time between now and then for everyone to become acclimated. I am willing to bet that we see some changes because that's a lot of time for Congress to be lobbied into refining the law.
