Congress has returned from its August and recess and wasted no time getting down to business. Yesterday, the Senate cleared a hurdle to pass It's Mini-Tarp, aka the Small Business Bill. After the cloture vote passed, the Republicans could not stop it. They then turned their attention to amendments to the bill.
One issue they tried to tackle was to to ease the 1099 requirement that was passed in the Health Care bill. We posted here, here, here and here regarding the 1099 issue and how onerous this will be to all businesses in every industry and every size. Businesses from sole proprietorships to large corporations will be impacted with the additional cost and time required to track every business they sepnd more than $600 per year with and send out a 1099 to each of these businesses. For many business this could mean sending out hundreds to thousands of additional 1099s per year. Unfortunately, both the proposed amendments to correct this issue failed.
For now, starting in 2012, all of your expenditures with any one vendor that total more than $600 will have to be issued a 1099. Although, I would expect over the next year we will see additional efforts to eliminate or modify this requirement. Both parties recognize, how this is a bad idea and was a bad piece of legislation that was allowed to pass.
Do you still file your taxes using paper coupons. If so, you may need to convert over to the IRS EFTPS electronic payment system. The IRS has published a proposed regulation (REG 153340-09), that would eliminate the rules for making deposits via paper coupon. After Dec. 31, 2010 the paper coupon system, maintained by the Department of Treasury, will no longer be maintained.
The Electronic Federal Tax Payment System (EFTPS) was launched in 1996. It is used as a vehicle to make tax payments to the federal government. It is available to individuals, businesses, payroll companies, federal agencies, and tax professionals. Most companies use it as the preferred method for making payroll tax deposits, however many small businesses are still using paper coupons to make payroll tax deposits.
If you are a small business owner and you are still using paper coupons, you will want to check out the EFTPS web site to learn more about the EFTPS system and how to apply for a pin number before the December 31, 2010 deadline.