Our most recent School of Tax Strategy teleconference call was a huge success. Many great questions and a high volume of participants. Some of our students had additional questions they sent to us following the call. One of them regards the new law on 1099's. Here is the issue and the answer:
Q: Historically, businesses have been required to issue a form 1099 to every individual or partnership to whom they paid over $600 for services. The Health Care Reform Act changed this requirement to cover more payees and more payments. What are the exact rules now?
A: Beginning in 2012, businesses will have to report all payments to any single person, including an individual, partnership, LLC or corporation where the total of the payments made to such person during the year for either services or property exceeds $600.
This is a huge change from current law, since now property is covered. This means that if you purchase a computer from Best Buy, you will have to send Best Buy a 1099. There have been several attempts to change this law already and there are hopes it will change prior to 2012 when it becomes effective.
Warmest regards,
Tom
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Posted by Sanda Parfait | July 11, 2011 4:28 PM
Posted on July 11, 2011 16:28