With the newly enacted health care legislation, year end 1099 filing requirements for the 2012 calendar year have become a new challenge for companies large and small and even some nonprofit organizations . The new law may catch some companies off guard and most certainly will increase the year-end reporting burden. The new legislation changed the requirements for filing 1099's from entities doing business and paying out funds to non-incorporated entities such as individuals, sole proprietorship's and LLCs.
Under the new law, every business that pays more than $600 to ANY business, non-incorporated and even corporations, during the course of the year, must issue a 1099 to that entity. For example, do you spend more than $600 at Sam's Club or Costco? You're required to issue a 1099. Spend more than $600 through CDW or Dell? Same thing - 1099. As you can see, this filing requirement can be anywhere in the range of a headache to quite overwhelming! There have been recent calls to exempt small businesses from this requirement or to repeal this portion of the legislation altogether. Until that happens though, companies should be prepared to file under the current law. CFO Magazine has a good article on the new tax law changes at http://www.cfo.com/article.cfm/14518134/c.
There is still the continuing requirement to file 1099 information electronically if the business has more than 250 1099's to issue. For small businesses, the new law may very well push them into the electronic filing requirement unprepared to do so.
If the new law is not changed, year end reporting will be very difficult for many businesses. Make sure you take the time to discuss this issue with your clients and help them determine if their current software programs can handle the reporting requirements or, if you provide year-end information reporting, that your programs can handle the workload. Even is the law is repealed or changed, this topic makes for good conversation with your clients.
