Looks Like the goverment is going to put most of us Out Of Bussiness

[just_sawing]

With The new Health Care bill it appears that part of it is that every purchase $400.00 has to generate a 1099 to the goverment. When did buying logs make a paper work night mare. It isn't worth it if they keep this in the Bill as wrote.

[fishpharmer]

When does that go into effect?  Or had it been in existence before the health care bill?

Not that I buy logs, but it can affect all manner of small business.

[stormyweatherman]

i haven't heard about that.  does anyone have any more intel on that one?

[jeffreythree]

I train accounting office employees in car dealerships on our dealership management software as a day job.  1099's already had to be submitted by these dealers for any yearly total over $600 to an individual vendor(ex. outside detailer or penstriper).  I looked up the changes since it will definitely affect me, and it looks like if anyone pays anybody else for goods more than $600 starting in 2012 a 1099 will be needed.  For me that means dealerships would have to issue 1099s for goods as well as services.  For a sawmill, it means anybody that buys more than $600 worth of wood or milling services will need to send in a 1099 reporting your services or goods and sending one in reporting, oh say Woodmizer, for the total dollars of blades you may have bought for they year from them.   Still just a yearly total if more than $600 and one per entity, but now all individuals and business must do it for all yearly totals.  Starts in 2012.  Sounds like a good question for a CPA to see the real effects.  Thanks for the heads up however it turns out.

http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/

http://www.accountingweb.com/topic/tax/costly-changes-1099-reporting-health-care-bill

[stormyweatherman]

wow man!   no public debate.  they used to call that taxation without representation.   i hope people are keeping informed and getting this information out there.  this country is in a lot of trouble. 

excerpt from first website http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/

Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.  The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.

Right now, the IRS Form 1099 is used to document income for individual workers other than wages and salaries. Freelancers receive them each year from their clients, and businesses issue them to the independent contractors they hire.

But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.

The bill makes two key changes to how 1099s are used. First, it expands their scope by using them to track payments not only for services but also for tangible goods. Plus, it requires that 1099s be issued not just to individuals, but also to corporations.

Taken together, the two seemingly small changes will require millions of additional forms to be sent out.

Here's some information about another law that was passed in America a few years back:
The British Parliament passed the Tea Act on May 10, 1773. This allowed the British East India Company to trade Chinese tea directly from China to America to completely avoid paying high duties. This undercut the prices offered by colonial merchants and therefore infuriated them. Samuel Adams called for a series of protests and meetings once the first East India Company Ships arrived in Boston. Governor Thomas Hutchinson struggled against the Sons of Liberty to have the ships anchor in the harbor. The more meetings held by Samuel Adams, the more people attended; the meetings attendance numbered into the thousands.

Read more at Suite101: Samuel Adams and The Boston Tea Party: Organizion of the Sons of Liberty and His Role in Independence http://colonial-america.suite101.com/article.cfm/samuel_adams_and_the_boston_tea_party#ixzz0uvwyo4HL

[pigman]

As a farmer and sawmill operator I have been sending 1099's and receiving them for several years, but as stated above, they were only for services, not goods and only to non corporations. I am just glad I am going out of business.
Over the years I have noticed that other farmers send me 1099's for services I have provided worth more than $600 but corporations and rich business owners never send 1099's to me when they pay me more than $600 for services.

[Peder McElroy]

Vote the BUMS out!!!!!!!!!! We don't need anymore Taxes enough is enough. Stop the runaway Goverment SPENDING.

[jtbartlett]

What's that have to do with the price of tea in China? Not much. The tea was coming from India.  The tarriffs on the direct shipments from India were lower than coming from England. I like Tea. I like lower taxes. You might ask where's the rub? Well, I'll tell ya. The local merchants like selling you and me tea at higher prices making their own pockets heavier. That doesn't help you or me out does it?  It's good for the guy doing the selling...not so good for the guy doing the buying.  I am more often than not a guy doing the buying.  Samual Adams was born with a silver spoon, much like many of our founding fathers. He also lost his fortune...as a failed merchant.  It's a great story, but it has absolutely nothing to do with raising taxes.

As far as 1099's go? Cash is always king.

[stormyweatherman]

i was more concerned that the new tax law on 1099's is buried in a 2700 page health care law!  to my mind, that is taxation without representation.  no public debate on a law that will affect millions of businesses and private individuals.  the reference to sam adams was more about the sons of liberty and the american reaction to a series of laws passed by the British parliament that saddled many Americans (not just the more well-to-do) with unfair tax burdens and unreasonable economic constraints. 

there was fairly broad-based support for the American revolution.  the British had everyone under their yolks one way or another up until that point, regardless of where they were in the economic food chain.  its also true that the more wealthy founders, in spite of their wealth, took great pains to protect the 'general population' from unreasonable intrusions and repressive measures that threatened their freedom.  the bill of rights and lots of provisions in the constituton come to mind.  i don't think they did that purely out of self interest.  so the silver spoon argument only holds so much water for me.  though i understand your point about the price of tea in china  

[jtbartlett]

I guess I don't understand how 1099's are additional taxes. Everyone is already reporting their income to the IRS.....right? Since you're working on a per job basis you're already required to report your income and submit due taxes. Isn't this topic more about taxes you'd just rather not pay? Tax rates haven't changed at all. Public debate isn't necessary to enforce laws that are already on the books.  Am I just missing your point?

[Dan_Shade]

it is more paperwork, and time spent doing paperwork = opportunity cost of doign something else.

It's absurd.

[stormyweatherman]

forgive me.  i have "o pine d".  i thought i better use that word to remind me that i'm on the forestry forum and not a political blog.   

strictly speaking you are right.  its not a new tax per se.  my point is broader than that and i wasn't trying to be misleading.  Congress manipulates the tax codes and means for reporting revenues to the goverment continually.  to the point that most people have no idea how much they are being taxed, or how many times their income is being taxed by multiple levels of government.  but Congress does all this without sufficient knowledge or participation on the part of the American people.  burying this particular modification in the health care law is part of what i'm trying to point out.  tax codes, tax law enforcement, new taxes are all potentially onerous to the economy and to citizens.  there should be much greater transparency in this than there is.  they're also simply regulating small business to death.

i would actually also disagree at some point with the idea that local merchants selling tea (or something else) at a higher price is categorically bad for consumers.  if local economic enterprise creates and keeps jobs in the U.S. rather than sending them overseas, then i might pay a little more.  government used to help out here also, by providing some price protection through duties on imports.  too much of this is bad--granted.  but total absence of it creates a giant sucking sound in the american labor markets. 

in the end, its hard to buy anything if you don't have any money because you don't have a job or a business anymore.  if you want to compete with the average chinese, mexican, indian, vietnamese, etc. laborer in the job market, then you can be pretty confident that the past 25 years of American foreign, domestic and economic policy have brought the United States closer to that reality.  and it hasn't been all that great for the American people.  or those folks, who the soon to be hansomely rewarded and also unemployed, BP exec referred to as the little people.  its the big international corporations that are winning at this game.  but what happens to them and governments who live off of tax revenues, when they've driven labor costs low enough that nobody can afford to buy anything.  that's exactly what happened in the 1920s before the market crash and great depression.  demand slacked because working folks didn't make enough to support a consumer economy.  and the whole thing started to unravel.

[stormyweatherman]

and it was chairman svanberg, not hayward that referred to bp caring about the small people.  the one that looks like darth vader!  sorry, i'm a little scorched from sealing a 250 foot driveway today. 

its just that i see and know a lot of working people like myself (many of them are customers too), and we're out busting our humps to make an honest living.  i'm reading about it on this forum too.  more and more i see the government getting in the way for their own gain or their constituents (and that isn't us as far as i'm concerned).  but we're required to write the check for it nonetheless.  and our kids and grandkids have lost a lot of opportunity and freedom.

[Ron Wenrich]

I think the provision is for cash sales.  If you use a credit card, then those 1099s go away.  I don't understand why, but I believe that's the way its stated.

That tax law was dreamed up a long time ago.  They think it will bring in another $300-400 billion in taxes.  They were just looking for a bill to put it into, and the health care bill was the ticket. 

I've heard it said that taxation with representation isn't everything its cracked up to be.   

[jtbartlett]

I hear, and agree with much of what has been posted above, except for the misconceptions that we are going to be put out of business because we are (still) required to pay taxes on income we make.  There is no new tax so the issue is a non starter. Some folks find the paperwork to be time consuming but there's no getting around that.  I drop off my slips quarterly and the nice people who file my taxes take care of the rest. It's cheaper, faster and easier for me. I'm guessing it will probably cost me a few more stamps but I think I can handle it.  $300-400B isn't new taxes being raised anyways. It's simply taxes owed on income that is not being reported.

46% of Americans do not pay federal or state taxes.  That's almost half of the people you see walking around every day.  How's that grab ya?

As far as competing with Taiwan, Vietnam, China, Malaysia and other countries who produce  goods to be sold in the American market? BUY AMERICAN. Made in the USA. Is it protectionist? You're *DanG well right it is. Every single dollar that leaves this country further weakens our economy. If you can't find goods not made in the USA, maybe you don't need them.  Vote with your dollars, it's the only real vote you have anyways.

Back on topic... I built my bandmill because I'm too cheap to buy one. I don't do a lot of stimulating the economy when I can avoid it.  Don't sweat the 1099 reporting. It doesn't change a penny what you pay in taxes.

[JSNH]

If I buy a car it is with taxed money. When I trade it in in 2012 with the trade in I receive I will get a 1099 as additional income and be taxed again. If it works this way it will kill car sales but it will also wake up many Americans.

[pigman]

JSHN, you only have to pay income taxes on the profit of the sale . I kind of doubt that you will be selling that car at a profit.

[Randy88]

Maybe we shold all vote next time and be sure to vote for those that will actually READ the bills before they vote on them.  I'm not real sure but I can't help but think if they were to vote on a salary decrease for all government officials they would read that.    

As far as not changing anything you pay in taxes, really, I find that interesting, all these years of doing 1099's and getting them 2-4 months late and on top of that some twit that typed them up typed in the wrong amount and that triggered an audit so I had to spend more time in an audit and also more paperwork to fill out not to mention the lost income due to sitting in an audit and hiring my taxperson to help with the audit to provide clear documentation the mistake didn't come from me.   Not sure what world your living in but my reality is seeing a lot more paperwork, thus potentials for mistakes and more opertunity to deal with those mistakes just so the government can keep closer eyes on everyone and the catagory for tax preparation and legal fees on my tax return looks like its going to get a larger dollar amount in the column, and if it came out of my pocket I do consider it a cost FOR taxes and I really don't care who cashes the check.    Its nice to know someone out there has things go their way and others don't make mistakes that cost them money but I've found over the years "if its expensive and going to happen to someone its going to be me" and it always costs me more.    The paperwork just needs to be done and you can't get around that, I've got a better idea, since its not going to cost any more for us then why do we need to do it at all??   Any time spent on unnecessary paperwork is time I could spend doing something that does make me money or I do enjoy.

[ely]

whats worse on the country as a whole? the small timers that avoid taxes, or the rich folks that beat the country out of taxes all together.

i dont want to do any paperwork. let alone more paperwork.

[Hoss]

We ain't seen nothing yet. Wait until the government's debt commission recommends a value added tax (federal sales tax). They will say we need it to bring down the national debt but why not just stop spending like a drunken sailor. (I appologize in advance to the sailors in the crowd---if I remember correctly some of my fondest times were spent drinking with sailors.) The value added tax (VAT) will be added to everything we buy and everything we sell. I can't hardly wait to get the VAT returns in the mail, fill them out every month, and send the government the money I have collected for them. I will then be able to add tax collector to my employment resume. Ya got to love where our country is headed.
Hoss