Jan 1, 2012: 1099 Nightmare scheduled to Start
What do you usually report on Form 1099? Correct, payments to independent contractors.
On January 1, 2012, businesses large and small may have to wake up to a whole new game when it comes to fling Form 1099. From then on, they are required to issue 1099's to every vendor to which they make payments of $600 or more in any year. $600??? That could be one or two decent dinners in NYC for you and your major customer. Are you supposed to issue a 1099 to Peter Luger?
Obviously, this could add huge additional reporting requirements and be a major hassle for businesses and their accountants. Let's hope for some additional regulations that would exclude major groups of businesses and transactions. The Journal of Accountancy has has the low down in "The Coming 1099 Revolution….are you and your Clients ready?" Yet more coverage, here and here.