According to a recent release from CNNMoney.com, the passed Obama health care bill includes a BIG surprise for small business in Indiana and across the United States.
Buried in section 9006 of the health care bill, there are just a few lines that are going to create havoc for small businesses. Beginning in January 1, 2012 – just 19 months away; all businesses will be required to issue 1099 tax forms on everything purchased over $600. Not just individuals; but for every goods or services purchased.
A quick review of my check register, my small consulting firm will be required to issue more than 300 separate 1099’s to institutions such as the phone company, garbage company, utility company, cell phone provider, office supply (Office Depot, Costco, Staples), internet provider, Apple Computers, lawn mowing service, window service, gas stations, just to name a few. Larger businesses that purchase materials from multiple sources (one of my clients has over 300 suppliers) will have a daunting task. You will be required to find their corporate address, corporate tax number and identify the department the information goes to. This will waste hundreds of hours in lost productive time and increase your tax bill at the end of the year. More work for thinly staffed companies that are trying to survive the Great Recession.
Representative Dave Camp (Republican from Michigan) released a new report detailing how the Obama healthcare bill vastly expands the responsibilities of the Internal Revenue Service adding up to 16,500 people to expand their auditing capacity. Are we more productive and profitable holding the hands of auditors or helping our customers?
Small business owners cannot afford to be passive politically – our elected officials are out of touch with reality and need a wake up call. Contact your local state and federal representative and tell them your thoughts on the new 1099 law.
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