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New 1099 Requirement Repealed

by kindsvater
8 replies
There were numerous threads last year rightfully complaining about the new 1099 filing and record keeping requirement in the Health Reform law. Briefly, anyone you paid $600 or more to as part of your online business you needed to get their personal tax information and file a 1099.

That requirement has been repealed.

Source: Senate repeals part of health care law - Jennifer Haberkorn - POLITICO.com
#1099 #repealed #requirement
  • Profile picture of the author tpw
    [DELETED]
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  • Profile picture of the author Josh Anderson
    Applause! Can't say more without getting political :-)

    The house must still pass their own 1099 repeal bill to finally be rid of it.
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    • Profile picture of the author tpw
      Originally Posted by Josh Anderson View Post

      Applause! Can't say more without getting political :-)

      You could censor yourself like I have done.
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      • Profile picture of the author Josh Anderson
        Let me restate that... I can say more... I just can't type it here

        Originally Posted by tpw View Post

        You could censor yourself like I have done.
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    • Profile picture of the author AnitaCross
      Okay, I read the article. I still have a non-political question.

      I've been contacted by my merchant account (Visa/MC) and American Express, (Discover Card has yet to weigh in on this,) regarding a new reporting requirement beginning January 1, 2011.

      Under Section 6050W of the Internal Revenue Code, these bank entities will be required "...to report the gross amount of each merchant's payment card transactions on Form 1099-K..."

      (I've been contacted because these accounts are under my DBA, but as a sole proprietor, the IRS uses my SSN. More paperwork, sigh.)

      So I'm wondering, is this covered under the part of the law that was repealed?

      Has anyone seen an article that addresses this?

      No politics, just money!

      -Anita
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  • Profile picture of the author Michael Oksa
    Three words:

    HOORAY!

    HOORAY!

    HOORAY!

    I was asking my accountant about this two weeks ago, and he said there was just no practical way it could be done. I know he meant well, but then I thought to myself, "when was the last time the ********** cared about being practical?"

    All the best,
    Michael

    p.s. Thanks Bill. This self-censoring works great.
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    "Ich bin en fuego!"
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  • Profile picture of the author tpw
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    • Profile picture of the author AnitaCross
      Originally Posted by tpw View Post

      Kindsvater will weight in I am sure.

      But I think the part that is repealed is the part that says you have to give a 1099 to all of your suppliers.

      The part where you have to report your earnings is not part of the repealed legislation.
      Well, it's not me reporting it, it's the banks. Not that I care, I report all my income. A friend needed a dog sitter once, and paid me to watch her dog for a week. I invoiced it, and applied the payment in QuickBooks. Can't be too safe when we're talking IRS!

      The main thing is the extra hassle of proving to the bank that Anita Cross and Call Of The Wild are one and the same.

      Not to mention they'll be withholding 28% of everything if the records don't get updated.

      -Anita
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      • Profile picture of the author Dan C. Rinnert
        Originally Posted by AnitaCross View Post

        Well, it's not me reporting it, it's the banks. Not that I care, I report all my income. A friend needed a dog sitter once, and paid me to watch her dog for a week. I invoiced it, and applied the payment in QuickBooks. Can't be too safe when we're talking IRS!

        The main thing is the extra hassle of proving to the bank the Anita Cross and Call Of The Wild are one and the same.
        That's the thing that worries me. You'll have all these entities reporting your income to the IRS. And, given that people that work in government are not always the sharpest crayons in the box, will they figure all this out?

        For example, let's say ABC Company pays me $5,000 through PayPal. At the end of the year, ABC Company reports to the IRS that they paid me $5,000. PayPal reports that I received $5,000. My bank reports that $5,000 was transferred into my account.

        Will the IRS know that I only received $5,000 out of those reports? Or will they think I made $15,000 and under reported by $10,000?

        That's the thing that worries me. People say that the IRS is smart enough to figure it out, but I don't have that kind of faith in government.
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  • Profile picture of the author J Bold
    I was never really worried about it after considering how impossible this would be for accountants, business owners and yes, even the IRS.
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