1099′s – New Law changes requirements beginning in 2012

The burden placed on small businesses and start-ups just keeps getting higher and higher.

Beginning in 2012 businesses 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. These changes will cause businesses to have to track many more of their transactions and issue many more forms – if they stand.

This will hugely increase the number of 1099s issued each year and massively increase the paperwork required to track these transactions because it adds both corporations and goods.

Under this new law you will be required to issue a 1099 to companies such as Costco and Smart & Final, and all other vendors for items purchased for resale.

This provision is beginning to be noticed by more and more people in the small business community and will hopefully be reconsidered.