1099s Still a Go for All Business Transactions
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.