Did you know that starting in 2012 all businesses will be required to prepare Form 1099-MISC for all services and goods purchased from all vendors in excess of $600. The 1099 would have to be filed with the Internal Revenue Service and the person or entity you paid. Presently business are only required to file a 1099-MISC for services in excess of $600 and most corporations are exempt from receiving a 1099.
These new reporting requirements are in section 6041 of the Internal Revenue Code (the Code), which was amended by section 9006 of the recently passed health care reform legislation - Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, 124 Stat. 119 (the Act). It should be noted once again that the new reporting requirements under these amendments apply to payments made only after December 31, 2011.
This new requirement will be burdensome and costly for small businesses to compile the data and prepare the Form 1099-MISC information return. It presents an overwhelming compliance burden on the small business community. For example, as the requirements stands now it seems that any time a small business makes a purchase at an office supply store in excess of $600 it will have to send a 1099 for that purchase to the store at the end of the year.
The Treasury Department and the Internal Revenue Service will be issuing guidance and regulations on how to comply with this new requirement. As a result they have asked for comments from the public. You can find further information regarding public comment at http://www.irs.gov/pub/irs-drop/n-10-51.pdf. Your comments can help the IRS issue implements the requirements of this new law in a manner that minimizes burden on your small business.