Senate Passes an Amendment to Kill the New 1099 Law
The Senate approved an amendment to repeal the expanded 1099 requirements which was included in the Patient Protection and Affordable Care Act (Obamacare). The new 1099 requirement forces business owners to report to the Internal Revenue Service any purchase of goods and services over $600 a year from another business or individual. The result of this law will cause undue burden on small business owners. For example, under the new law, a business owner is required to send Chevron a 1099 for purchases of gasoline assuming the business purchases more than $600 from Chevron. Under the old 1099 law, independent contractors that provided services to business owners received 1099s (i.e. Attorneys, Janitorial Personnel, CPAs, Engineers, etc.).
It is expected that the House will approve the amendment and President Obama is expected to sign the amendment once it reaches his desk.
If you want to read more about this topic, Accounting Today has a great article that discusses the key issues. Feel free to contact me at Wallace Neumann & Verville, LLP if you would like to discuss how the 1099 law will affect your business.