Beginning in 2012, all companies must report to the IRS any payments to vendors, suppliers and service providers that exceed $600 in a year. Right now, 1099 forms are filed by businesses that have hired outside contractors who are not employees. The requirement, created to help pay for the new health care law, would expand 1099 reporting in two ways: it would include payments to incorporated businesses (not just independent contractors) and payments for goods and services. For example......
For example, if your business purchases a new computer at your local office supply store for $800, you will have to fill out a form 1099 for that vendor. You will have to keep a running tally of purchases made in smaller amounts but add up to $600 by the end of the year. The increased paperwork is expected to be quite burdensome. According to the National Small Business Association, an estimated 100 million 1099 forms will be filed under this provision.
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