Here is an article that one of our managers (Lance Jacob) wrote.
Small business may have extra tax reporting requirements starting in 2012 due to the passage of the Patient Protection and Affordable Care Act (Health Care Act) signed by the President on March 31, 2010.
In the past businesses have been required to prepare and file IRS Form 1099-MISC for each person they have paid at least $600 in rents and services (including parts and materials) to during the year.
Under the Health Care Act passed in March 2010, businesses that pay more than $600 during the year to non-tax-exempt corporate providers of property and services will have to file an information report with each provider and the IRS (for Payments made after December 31, 2011). In addition, businesses will have to file information returns for any person (and corporations) that receives $600 or more from the business for property and merchandise.
Basically, if a business pays any vendor (corporate or individual) for the purchase of property or merchandise totaling $600 or more, they are required to prepare an information return for that vendor. The information to be reported includes name, address, and federal identification number (or social security number) of the vendor.
Unless this portion of the Health Care Act is repealed, small businesses are looking at substantial costs (time in collecting information, costs for someone to prepare the returns, and handling any resulting correspondence from the IRS for missing information) related to the new reporting requirements.
On July 30 a bill to repeal this section (Sec. 9006) of the Health Care Act was taken up by the House of Representatives (H.R. 5982 the “Small Business Tax Relief Act of 2010”). Unfortunately the bill was defeated on the same day. So, at this point, the reporting requirements are still scheduled to go into effect as of January 1, 2012.
Lance Jacob, (800) 772-1065
Checkpoint RIA Research