The cause of the regulation is obvious.
As a businessman, I get to deduct my costs and expenses from my gross income in order to come up with what is taxable.
But, if I bought some horse manure from the horse farmer down the street and paid him cash (because he doesn't have a credit card machine), when I report it on my taxes; I could just as easily say I paid him $900 when I really paid him $650; thereby saving myself $80 in taxes.
But, on the other hand, if I paid him 900 in cash and he reported it as 650; how would anyone ever know the difference? By filing a 1099-MISC; the IRS has record of that $900 and lying on his taxes just got a lot harder.
Basically, the law is based on the premise that everyone lies on his taxes.
But, furthermore, it is YET ONE MORE REGULATION that will make it hard for a small business to stay in business.
My businesses are SMALL. They need me taking an active role. I am not a fucking accountant and I am not an absentee owner. I am a primary productive individual whose efforts are important to my enterprises.
This is one more thing where the government forces me to give them my time WITHOUT COMPENSATION. Eitehr that, or forces me to pay SOMEBODY ELSE to do the "compliance."
Of course, they aren't going to give me anything to compensate for that.
So where is that money going to come from?
I'll tell you where it is gonna come from: one fewer person getting hired, or employees having to pay more for benefits, etc.
I can't squat down and poop money. At any given point in time cash is finite and it is a zero sum game. Anything I spend on idiotic government compliance crap automatically becomes unavailable for other useful purposes.
I agree Jolene -- this needs to be repealed!
Even worse, incidentally, is the fact that those 26 million sole proprietorships aren't using TIDs -- they are using the owner's SSN. Just THINK of the number of people who will now know those guys' SSNs. It is an identity theft smorgasborg in waiting.
has NOTHING to do with health care? Nope. That little gem got slipped in and it's going to be expensive on all of us starting in 2012. In fact, it's tied in with Section 6041 of the Internal Revenue Code of 1986.
Yes, The IRS! Not health care, THE **** IRS!
This may already have been covered, but looking back through a couple pages of threads, I don't see it.
As I understand it, if you're in business and you buy more than $600 in a calendar year from a vendor (or if what you buy helps you go into business at any given time in that calendar year), you must get the vendor's Tax Identification Number (TIN). At the end of the year, YOU are required to give that vendor a 1099-MISC.
To quote Erich J. Ruth: [quotes] "Starting in 2012, all business payments or purchases that exceed $600 in a calendar year will need to be accompanied by a 1099 filing. That means obtaining the taxpayer ID number of the individual or corporation you’re making the payment to — even if it’s a giant retailer like Staples or Best Buy or Walmart — at the time of the transaction, or else facing IRS penalties. To clarify, that’s you the customer, the person who purchased the computer from Walmart, who must attain the EIN number of Walmart so that you can know who to send your 1099-MISC to.
"In essence, the 1099-Misc is having its role changed from a form for tracking off-payroll employment to one that must accompany virtually any sizeable business transaction.
"One exemption is the use of a credit card. If you go to Walmart to purchase a $600 computer and you purchase the computer with your credit card, then you don’t have to issue a 1099. If you purchase with cash, then you do."
A question asked by a reader: "Does that apply to my buying groceries and gas for myself during the year? I know I spend more than $600 in the year on food and gas. How about books at the bookstores? What about clothes or electricity or my personal rent? Does this 1099-MISC affect all of that, too?
"His answer: The new regulations, which kick in at the start of 2012, require any taxpayer with business income to issue 1099 forms to all vendors from whom they purchased more than $600 of goods and services that year. That promises to launch a fusillade of new paperwork: An estimated 40 million taxpayers will be subject to the requirement, including 26 million who run sole proprietorships, according to a report released by National Taxpayer Advocate Nina Olson.
"It applies to you as well as the people you vend to. The IRS plans to exempt transactions made through credit and debit cards." [end quotes]
This needs to be repealed. If this stands, then every one of us who is in business or plans to open a business will be required to do this. It gives the government a statement of what you bought and from whom. Do you really want the government to know all that?
The cause of the regulation is obvious.
As a businessman, I get to deduct my costs and expenses from my gross income in order to come up with what is taxable.
But, if I bought some horse manure from the horse farmer down the street and paid him cash (because he doesn't have a credit card machine), when I report it on my taxes; I could just as easily say I paid him $900 when I really paid him $650; thereby saving myself $80 in taxes.
But, on the other hand, if I paid him 900 in cash and he reported it as 650; how would anyone ever know the difference? By filing a 1099-MISC; the IRS has record of that $900 and lying on his taxes just got a lot harder.
Basically, the law is based on the premise that everyone lies on his taxes.
But, furthermore, it is YET ONE MORE REGULATION that will make it hard for a small business to stay in business.
My businesses are SMALL. They need me taking an active role. I am not a fucking accountant and I am not an absentee owner. I am a primary productive individual whose efforts are important to my enterprises.
This is one more thing where the government forces me to give them my time WITHOUT COMPENSATION. Eitehr that, or forces me to pay SOMEBODY ELSE to do the "compliance."
Of course, they aren't going to give me anything to compensate for that.
So where is that money going to come from?
I'll tell you where it is gonna come from: one fewer person getting hired, or employees having to pay more for benefits, etc.
I can't squat down and poop money. At any given point in time cash is finite and it is a zero sum game. Anything I spend on idiotic government compliance crap automatically becomes unavailable for other useful purposes.
I agree Jolene -- this needs to be repealed!
Even worse, incidentally, is the fact that those 26 million sole proprietorships aren't using TIDs -- they are using the owner's SSN. Just THINK of the number of people who will now know those guys' SSNs. It is an identity theft smorgasborg in waiting.
If not repealed, it will add a few group to the underground economy.
People just arnt going to do it. There are hundreds of thousands of sole proprietors who do business out of their pockets worrying about taxes once a year or when they have some money and get around to it.
They just dont keep accurate records and they arnt going to start now.
This law will make them into instuctors for the new recruits. It will balence out. The government will get less and the population will keep more of their income. Obomacare in action.
He said our healthcare costs would be down. I heard him! He didnt say how. Everyone thinks he lied. What he really meant was, people would pay less tax because of the healthcare bill.
Like he confessed, he wasnt doing a good job communicating. Fuck, he is smart!
To simply say it's a gross misrepresentation w/o something to back up the words looks like a knee-jerk emotional reaction, not a logical discussion. How is it a misrepresentation?
-- Modified on 12/19/2010 8:38:58 PM