The health care bill, in addition to creating burdensome mandates and higher taxes, means one other thing for small businesses – it’s time to buy a few extra filing cabinets
That’s because a little-noticed provision of the new law will change the tax filing rules for business transactions with government, nonprofits, and businesses of any size – creating mountains of new paperwork and a slew of unintended consequences.
Under current law, a business that purchases more than $600 in services from a self-employed independent contractor during a calendar year is required to file a 1099 form with the IRS disclosing the name, address, Taxpayer Identification Number of the contractor and amount paid.
Purchases of goods or transactions involving corporations are currently exempt from this reporting requirement.
