2012: all companies must issue 1099 forms for > $600 goods or services
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Section 9006 of the health care bill mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.
The bill makes two key changes to how 1099s are used. First, it expands their scope by using them to track payments not only for services but also for tangible goods. Plus, it requires that 1099s be issued not just to individuals, but also to corporations.
But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.
Posted at 12:37 pm May 6, 2010 EDT
Of course, also billions in income tax revenue for the IRS.
But, isn't it also double-taxation in some cases? A business already pays income tax on its income from sales, then they have to report the 1099 income (from any of those sales over $600) as well?
Posted at 12:45 pm May 6, 2010 EDT
I don't even get that about Paypal issuing 1099s - Paypal does not pay you anything. Your customers do. I would think it would be the actual person who paid you who should be issuing the 1099. (Just ranting, I don't know the specific rules about this)
Posted at 12:47 pm May 6, 2010 EDT
OK I saw the other post.
I am wondering ... services, that includes mail & shipping. So you'd have to issue a 1099 to the US Post Office, UPS etc.
Can you imagine how many businesses spend over $600 in postage? And sending 1099's to the US PO?
Gee I guess the gov't can hire a lot of people to process all this, and companies will have to hire people to do it... thus improving employment.
I saw something else, if the vendor doesn't provide their tax info you can withhold payment... does that mean, you can "buy" stuff from shady dealers, not get the tax info, and thus never have to pay for the purchase?
hmm individuals ... yard sales ... if you buy $200 from the wife, and $200 from the husband, and $250 from the kid, you have not bought over $600 from any individual.
Posted at 12:48 pm May 6, 2010 EDT
It is not just in "one purchase", it is total for the fiscal year from that person/vendor/service provider.
Paypal ... would not be based on the money that went THRU Paypal but on the total fees that you paid Paypal.
Tho I imagine Paypal would be reporting on what went THRU it ...
Posted at 12:51 pm May 6, 2010 EDT