With the passage of the Patient Protection and Affordable Care Act, and the Small Business Jobs Act during 2010 you might have heard of new reporting requirements for Form 1099. Some of these reporting requirements included reporting payments greater than $600 for services paid to any entity, including corporations, and requiring individuals who receive rental income to report payments of goods and services greater than $600 on Form 1099. These changes were to take effect during 2011 and 2012. On April 14, 2011, the expanded 1099 legislation was repealed. Source: ‘Journal of Accountancy’ http://www.journalofaccountancy.com/Web/20114071.htm
What does this repeal mean for you? It means the Form 1099 reporting requirements will remain the same as the prior year.
– Payments to an individual/sole proprietor or an unincorporated business (i.e. a Limited Liability Company) for rent or services in excess of $600 should be reported on Form 1099.
– Payments in excess of $600 made to attorneys for legal fees should be reported on Form 1099, regardless of the attorney’s entity type.
– Forms are due to the recipient by January 31st and to the IRS by February 28th of the following year.
To make your 1099 preparation process easier, have each vendor complete Form W-9 Request for Taxpayer Identification Number and Certification. This form gathers the necessary information (name, address, entity type, and taxpayer identification number) to determine if a 1099 is needed for a specific recipient. (You can print Form W-9 from the IRS website at http://www.irs.gov/.)
Please contact our office if you have any questions regarding the repeal of the expanded 1099 legislation and how this might impact your business or if you would like our assistance in preparing your 1099s in the coming year.
About Blackman & Sloop CPAs, P.A.:
Blackman & Sloop is a full-service CPA firm headquartered in Chapel Hill, North Carolina and is actively involved in auditing, taxation, management consulting, financial planning, and related services. The firm directs a large part of its services toward providing management with advice on budgeting, forecasts, projections, financing decisions, financial analysis, and tax developments. The firm also performs review and compilation services and prepares not-for-profit, corporate, individual, estate, retirement plan, and trust tax returns as well as technology consulting services regarding installation and training on QuickBooks. Blackman & Sloop provides services in Raleigh, Durham, Chapel Hill, RTP, Hillsborough, Pittsboro, Charlotte, and the rest of North Carolina. To find out more please visit http://www.blackmansloop.com
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