The 2010 health care act (The Patient Protection and Affordable Care Act), also known as “Obama Care”, included a few short sentences that will have a substantial impact on all businesses in this country.
Beginning in 2011 the IRS form 1099 will function as a tax form for ALL business to business transactions of over $600 (individual or combined transactions). For any sale worth more than $600, each party will have to collect information about the other and submit a 1099 to both the parties involved and the IRS.
In other words, if you buy a printer and other office supplies from Office Depot that total over $600 in the year, you will have to fill out a 1099 form. In order to make sure that you submit it properly, you will need to send a Form W-9 to Office Depot to make sure that you have their proper Tax ID number for the Form 1099.
Reporting requirements are set to begin in 2012. Both Republicans and Democrats in the Senate proposed Amendments to change or reduce some of the reporting requirements, but each party defeated the others’ proposals. If Congress doesn’t come to some agreement, will it cost more to do business in 2011? Sure looks like it.