On April 5, 2011 after a month‐long battle, the Senate voted to repeal the expanded Form 1099 tax‐reporting requirements in the Health Care Act. It was intended to increase tax compliance, starting in 2012, by requiring businesses to file a 1099 for all payments made to corporations and payments made for the purchase of property totaling over $600 cumulatively for the tax year.
Currently, businesses are required to file a Form 1099‐MISC to report payments of $600 or more made to persons who provide nonemployee services. Reporting is not required if the payments are made to a corporation. Fortunately, these Form 1099 reporting rules will not change after 2011, and organizations can breathe easier knowing this recordkeeping and reporting nightmare will not take effect.
©2014 Renner and Company, CPA, P.C. All rights reserved.