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ALERT: The following discussion has been repealed, 1099
filing requirement mirror 2010 rules
2011 and 2012 1099 year end
filing will be only as nightmare-ish
as in past years for
QuickBooks users!
The Patient Protection and Affordable Care Act passed in
2010 (HR 3590)
added a big burden to small business by expanding the
reporting requirements for 1099s.
In General, the old Law, as applied to most small
business, required 1099s to be sent for payments for
services in excess of $600 to unincorporated entities
(Sole Proprietors, LLCs, partnerships).
The New 2010 Law had expanded filing requirements effective
for tax year 2012 to include
1. Services
2. Sale of any property (this means products and goods -
not just real estate) (starting in 2011)
3. To all entities, not just unincorporated, so you may
even need to send one to
the big companies including 100 companies
In the year 2012 and later purchases your company makes in
in excess of $600 to any vendor made for
- Cost of Goods sold
- Entertainment purchases
- Office Supplies
- Contractors for Repairs and
improvements
- Purchases for auto repairs or
lawn maintenance if you deduct these for business
- And pretty much every expense
listed on your profit and loss report
- Although the law provided an exemption
to sending a 1099 for all transactions purchased with a
credit card.
HOWEVER-
The Reporting aspects of this
2010 law has been repealed!
http://www.irs.gov/govt/fslg/article/0,,id=238635,00.html
The Comprehensive 1099 Taxpayer Protection and Repayment
of Exchange Subsidy Overpayments Act of 2011 eliminated
new information reporting requirements that were created
by previous legislation.
The Small Business Jobs Act of 2010 provided that anyone
receiving rental income from real estate would be treated
as receiving income from a trade or business of renting
property; therefore, information return requirements
applicable to small businesses would be in effect. This
provision also is repealed; you are not considered to be
in a trade or business solely because you receive rental
income.
Articles that may be of help in determining if
your rental income from real estate is an
active trade or business. If it is, the
revenue and expenses do not belong on schedule
E.
http://www.cfo.com/article.cfm/14530675
http://www.irs.gov/publications/p925/ar02.html
This IRS Publication 925
says a trade or business activity is an
activity that:
Involves the conduct of a trade or business
(that is, deductions would be allowable under
section 162 of the Internal Revenue Code if
other limitations, such as the passive activity
rules, did not apply), Is conducted in
anticipation of starting a trade or business,
or involves research or experimental
expenditures that are deductible under Internal
Revenue Code section 174 (or that would be
deductible if you chose to deduct rather than
capitalize them). A trade or business
activity does not include a rental activity or
the rental of property that is incidental to an
activity of holding the property for
investment.
You generally report trade or business
activities on Schedule C, C-EZ, F, or in Part
II or III of Schedule E
Publication 512, page 12 has a nice write up as
to when you report your rental property on
Schedule C - Trade or business.
http://www.irs.gov/pub/irs-pdf/p527.pdf
Track 1099 information in your
QuickBooks File
- Get a W-9 Form from every vendor
that provides you with a service or for whom you rent
property from. This is important- this document will
tell you whether the vendor qualifies for exemption from
submitting a 1099 and how to report their name (so that
it will match the IRS database) on the 1099.
W-9 Form
- Enter into the Vendor center,
under the vendor record, under additional information
tab
that the vendor is eligible for a 1099
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