Great news for small businesses and rental property owners, the senate voted today to repeal the 1099 expanded reporting requirements. The 1099 repeal passed with a landslide vote of 87-12. The 1099 repeal (H.R. Bill 4 ) is expected to be signed by President Obama.
Under the previous expanded reporting requirements, small businesses and owners of rental real estate would have been required to file a 1099 with the IRS for any services, contractors, or vendors paid more than $600. This would have included payments to Office Max, Costco, Target, etc. Even though the 1099 expanded reporting requirements were supposed to bring in billions of dollars to help cover the cost of Obama’s Health Insurance laws passed in 2010, the reporting requirements put too much paperwork burdon on small busiensses and owners of rental real estate.
Congress has been working hard this year to come up with new legislation to repeal the expanded 1099 reporting requirements. However, neither side could agree on terms as to where spending should be cut or ways to generate additional income to help fund the Small Business Jobs and Credit Act of 2010 AND the H.R. 3590 Patient Protection and Affordable Care Act.
What does this mean for you and your business? The old 1099 reporting requirements go back into affect. Therefore, if you’re a business owner and have issued 1099’s in the past, you can probably keep doing what you are doing. If your business has never filed a 1099 and you are wondering what the hype is about, please contact your CPA to learn more about the 1099 reporting requirements.
Check out my 1099 Update on CafeTax.
Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.