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Charlie Sykes: Sykes Writes

HERE COMES THE 1099K

By Charlie Sykes

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Small business... brace yourselves.

Small-business owners face a world of troubles these days: a weak economy, impending health-care mandates, the prospect of higher taxes.
 
But one concern you hear about more and more is a huge new expansion in their IRS reporting requirements — a paperwork nightmare that will commence in 2012.
 
I got an earful on the subject after a recent speech to a group of employers in a small vacation town. They owned shops, a garage, restaurants. They did all their own bookkeeping at nights and on weekends. They did not enjoy it, but they were used to it. But now, they feared their lives were about to be consumed by a new bureaucracy.
 
They have reason to be afraid. Right now, business owners file two forms when they employ people: a W-2 for employees and a 1099 for freelance contractors. A typical small business files 10 such forms, at a cost of 3–5 hours of time per year.
 
Embedded in the new health-care law, however, is a staggering requirement: using a new form — the 1099k — small businesses will have to start reporting all their purchases of goods from other businesses. (You can see a draft version of the 1099K form on the IRS website.)
 
Did you rent a car or stay in a hotel? 1099K.
 
Buy ink and paper from Staples? 1099K.
 
Lease space in a local mall? 1099K.
 
Collect revenue from PayPal, eBay, or Amazon merchants? 1099K.
 
And don’t forget to collect each company’s taxpayer ID number while you are at it!
 
 

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  1. Robert - Jul 29, 2010 10:50 AM

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    Sounds like the IRS is trying to create jobs. Just so sad that this will again hurt and not help. More info given to and less service tendered from the IRS. I believe that this is getting out of hand.

  2. Herb N - Jul 29, 2010 11:04 AM

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    What does this have to do with health care again? Oh yeah.. it creates more HEADACHES!

  3. Mombo Napolitano - Jul 29, 2010 11:05 AM

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    This is an out-of-control government that desperately wants to keep spending. To keep spending they need to extract every last ounce of revenue out of everybody. Soon you, as consumers, will be filling out one of these or something similar for every purchase you make using the internet. And you better have paid the sales tax.

  4. Amy P. - Jul 29, 2010 11:16 AM

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    So basically the government wants to tax a small business if its owner farts wrong.

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