New tax laws. This is interesting

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http://money.cnn.com/2010/05/21/smallbusiness/1099_deluge/index.htm?source=cnn_bin&hpt=Sbin

I sent the link to my tax guy and this was his response.

Thanks for forwarding the article Karl. I have seen bits and pieces of this bill as it went through legislation. It still has a chance to be repealed as it will not be implemented until 2012. But as of now, yes your clients will be required to issue you a 1099 if over $600 of services provided.
I guess all we can do before then is just stay tuned.
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Cash discounts look appealing. Not to not report, just not the headache with using 1099's.
 
1099s

What is so wrong with that? If one is running a legitimate business you will need all your receipts etc. With stuff like that you can prove your income and be able to get a line of credit or loan from a bank. Look on the bright side, if your client is a corporation they will probably keep you as the preferred vendor so they don't have the headache of issuing lots of 1099s to different DJs for the same kind of service. They can send you a total tally at the end of the year.
 
But those who do not have repeat clients (brides) it would be a head ache. Asking them to give you a 1099. I report my income, I just don't think you have to have a 1099 for each client.
 
A 1099 is required anytime more than $599 is paid from any single source, it has been that way form umpteen years now!

The problem is going to be filing 1099s for every purchase you make and receiving them for every gig you do, in my case we are talking about a massive amount of paper work for both me and my providers!
 
Ed has it correct, business only so we don't have to worry about our clients unless they are a business. We will have to file the 1099s for what we purchase as a business.

This is a 2012 thing; two years away. I'm watching it but not worrying about it till then.

Besides, you won't have to report on 2012 to after 2012 and the world ends on December 21, 2012 so nobody will have to report. What, me worry?
 
lol looks like they want to bring in a GST type Tax (VAT)

we have had it here for years and when you tell the client to add 10% GST
they are willing to pay CASH so you dont have to record it to take tax from them

I love a all cash job!
 
Mobile Music 1 said:
If they wanted to capture more money in taxes, then all the photographers that aren't collected and submitting sales tax should be audited.

And tax evasion for those that are 1099 their employees as subcontractors.
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Well I happen to be one who 1099's subcontractors, and I have been through two audits because of that very subject and have posted on the subject before!.......... guess what!

No problems with either of those audits and no extra taxes owed!:sqbiggrin:

Sorry if that bothers you too much perhaps you are just angry that your boss 1099s you every year!:sqwink:
 
Thunder said:
Well I happen to be one who 1099's subcontractors, and I have been through two audits because of that very subject and have posted on the subject before!.......... guess what!

No problems with either of those audits and no extra taxes owed!:sqbiggrin:

Sorry if that bothers you too much perhaps you are just angry that your boss 1099s you every year!:sqwink:
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It's OK to 1099 to subcontractors, I was posting about legit employees getting 1099s.
 
Btw, I'm wondering how it's a hassle to deal with 1099's? Did you know, when you receive one, you need to put it in a file. That's it. Keep it for 7 years. That's it. How inconvenient is that?! What's the real issue? The businesses that have to submit 1099's do for every other vendor that makes any money too, so they know the ropes.
 
Val:

The hassle is not in the receiving but in the giving. Under the new law, which goes into effect in 2011 (and is reported on in 2012), you have to send a 1099 to every vendor you deal with as a business for which you spend $600 or more. So, if you buy more than $599.99 cumulatively from an office supply store then you have to send them a 1099. If you get $600 or more work done on your business vehicle, you have to send them a 1099. If your commercial auto insurance costs $600 or more then you have to send them a 1099. If your office space costs $600 or more to rent then you have to send your landlord a 1099.

You see the hassle now?
 
That's not really new - it's always been required that money paid by a corporation in excess of $600 to an individual (dba & sole proprietors) had to be reported on a 1099. The changes come in the form of new reporting requirments on banks and credit card merchant processors.

The most ridiculous is the extension to corporations and for all non-employment purchases - including goods. Imagine how much office equipment alone sells for over $600 per item! This part will definitely end up repealed not only because of the STUPID volume of paperwork every employee would be emcumbered with - but, also because there is no way the IRS could effectively process that many forms and follow up on all the discrepencies.
 
Well, let's HOPE it gets repealed Bob...

It would be a major paperwork burden for me, and millions of others. It's easier to go under the radar, and stop paying taxes all together...

That helps no one.
 
I just got a look at the 1099K form, the way the new rule is written it requires a 1099K to be filed for every purchase or every service of $599 or more from every Merchant or Third party customer period! Karl's accountant was correct this will be a requirement under the new law for any movement of money regardless of public or private!

Talking about a paper work nightmare this will be one! But it will create an entirely different underground market as already suggested by Rick in his post above!
 
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