The Senate voted Tuesday (April 5, 2011) to repeal the expanded 1099 information reporting requirements in last year’s Patient Protection and Affordable Care Act (PPACA) that require businesses report every expense they incur over $600 to the IRS. The measure passed the Senate with a bipartisan vote of 87 to 12. Read about it here in accountingtoday.com.
With current changes in the tax code and reporting requirements Merchant Warehouse hopes that we continue to see an environment that is not overly burdensome in regard to reporting. In spite of this repeal, the old standards of 1099 reporting remain in place. Form 1099 is required for those you conduct business with as service providers whom you pay over $600 to in a calendar year. Please visit the IRS (www.irs.gov) for detailed reporting requirements and rules.
At Merchant Warehouse, we will continue business as usual regarding IRS reporting because we believe strong vendor reporting and document retention is an industry best practice. We recommend all businesses be prepared for such requirements. As a practical matter however we, as everyone, are relieved that for now, it appears businesses will be able to report 1099 as we have for years under the same exemptions as before.
And remember, we recommend that you always confer with a certified tax accountant and/or financial advisor about all matters related to the IRS and taxes. For more information you might review: http://tax.cchgroup.com/downloads/files/pdfs/legislation/repeal1099reporting.pdf