Risk Advisor - Independent Contractors, HNI
If you have no employees and, therefore, thought the 2010 Health Care Act would have little or no affect on your business, you may want to look again. Slipped into the 2000+ page document was a mandate that could be extremely costly to all businesses that utilize independent contractors.
Under current Health Care Act, businesses are required to issue 1099s within the confines of specific circumstances. The language in the Health Care Act expands the information reporting requirement to an alarming degree, and will force millions of businesses to issue hundreds of millions of additional IRS Form 1099s every year.
Stated simply, 1099s will need to be issued by businesses whenever that firm pays more than $600 to another entity in a year. Some examples: if your business buys a piece of equipment with a price tag exceeding $600, you’ll need to get information on the seller and mail a 1099 to the seller and the IRS. If you lease property or equipment, you’ll have to be issued a 1099 by the lessor (and a copy will go to the IRS). Of course, all of these forms will have to match your accounting records.
DON’T SIT IDLY BY!! Trade associations are currently petitioning Congress and the IRS to delay implementation of this back-breaking Health Care Act (scheduled to take place in 2012). Get involved! Talk to your legislators and to any trade associations to which you might belong. Talk to your Chamber of Congress and to the U.S. Chamber of Congress. It’s not too late to get this provision repealed!