1099 Reform: Where Do You Stand?
Taking care of small business paperwork is a good chunk of my business; however, the new rules on the 1099 are excessive. I'm passionately opposed to the government expanding that part of my business. Let me explain.
This coming Monday, President Obama is scheduled to sign the Small Business Jobs Act that includes roughly $12 billion in tax breaks and a $30 billion lending program, but it does not include relief from the upcoming 1099 changes slated to begin in 2012.
How significant are these changes? Here's a brief refresher:
- Starting in 2012, all business payments or purchases that exceed $600 in a calendar year will need to be accompanied by a 1099 filing.
- In addition to gathering the information and creating a 1099 for providers of office supplies, office space, equipment and advertising services, you'll need to make sure you're reporting business travel expenses like hotel stays and car rentals. Yes – you could be creating a 1099 when working with Avis, United Airlines and Marriott when it's on your company's dime.
Bureaucracy is growing, and in just over a year, it'll be knocking on the doors of small businesses nationwide. Although small businesses are fairly used to taking time out of their days — and money out of their budgets — to accommodate Uncle Sam, there's a fine line between a business doing its fair share and unreasonable requirements being imposed upon America's economic growth machine. This leaps past the line by about 20 yards.
SurePayroll makes its fair share of money generating 1099s for our customers and this policy would be profitable to us, but it's not a good use of business owners' time. It will force them to spend more time managing onerous paperwork tasks and leave less time for business owners to generate more revenue.
This paperwork can only be bad for American small business.
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