Summer 2011: Northeast Philadelphia Tax Preparation Services Newsletters
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EXPANDED FORM 1099
INFORMATION REPORTING HAS BEEN REPEALED
After months of haggling, both houses of Congress
put aside their differences and repealed the requirement that businesses report to the IRS all payments over $600. The provision, originally enacted to fund the health care bill, would have required any business that pays another business or individual more than $600 for goods or services in a year to file a Form 1099 with the IRS. The requirement was set to go into effect in 2012. Congress also repealed the rental expense reporting requirement that went into effect in 2011. Under that rule, all taxpayers with rental property would have been required to report to the IRS any expenses paid on the rental property in excess of $600 per year.
Both reporting provisions were criticized for the huge burden they would have put on small businesses and taxpayers with rental property. Even though both the House and the Senate and the Democrats and Republicans all agreed the reporting provisions had to go, Congress spent two years debating how to make up the tax revenue lost by repeal. They finally agreed on a revenue raiser that requires people to return overpayments of health care subsidies if their incomes exceed 400 percent of the poverty level. Although the President was not in favor of
this offset, he accepted it in the end and signed the repeal bill.
As your Tax Accountant in Northern Liberties Philadelphia, I cannot stress enough how important it is that the expanded information reporting provisions were repealed. These requirements would have cost you enormous time and energy to track every business payment made for such things as office supplies at Staples to rental payments for a lease. You would have to get the Taxpayer Identification Numbers for everyone you made payments to. You would have been required to calculate the total payments made to each person, each business or each store, unless you paid by credit card. Then, you would have had to file 1099 forms with the IRS for each vendor that received more than $600 per year. If you failed to do so, you would have been subjected to significant penalties.
We are all grateful that common sense prevailed and Congress was able to come together for the public good and abolish these ill-conceived tax provisions before they took effect.
In preparing
your small business tax return for your Northeast Philadelphia Small Business,
please do not hesitate in contacting your Northeast Philadelphia Tax
Accountants at 215-667-8839. We proudly
provide accounting and tax preparation to small businesses in Northeast
Philadelphia.
Source:
National Society of Tax Professionals
About Us:
Excellence
Accounting and Tax Services are your Northeast Philadelphia Tax Accountants
with 24 years of combined Accounting, Tax, and Auditing Experience. We provide Accounting and Tax Preparation Services
to Small Businesses in Northeast Philadelphia.
We also have other tax locations in Northern Liberties in Philadelphia.
If you have any question on what is deductible for
your Northeast Philadelphia Business, please do not hesitate in contacting your
Northeast Philadelphia Tax Accountants.
We proudly provide tax preparation and accounting to Northeast
Philadelphia. Please do not hesitate in
contacting us at 215-667-8839 or visit our website at www.excellencetaxservices.com
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