You might have heard that 1099 Repeal Bill has passed and is a big win for small businesses. Great, except “What is the 1099 Repeal Bill and Why is it a big win?”
In a nutshell, the new bill was going to cause a ton of paper work for small businesses (hence the picture) that was tucked away in the Health Care bill. But now it’s been repealed!
One of the clauses in the Patient Protection and Affordable Care Act (PPACA) that was approved in March 2010, required that any business that made annual purchases TOTALING $600 or more to most organizations, had to file a Form 1099-MISC with the IRS. That means as you go about your day-to-day business and get materials from your key suppliers a few times a month, once you hit that $600 mark you would then need to submit a 1099-MISC, with all the details. Same thing for when you grab supplies from Staples, then grab different ones from Costco, Best Buy, your local supplier etc. Sounded like lots and lots of paperwork coming down the chute.
Thanks to lots of lobbying by various bipartisan small business groups, now it will stay the way you are used to – completing a 1099 form only for individuals or unincorporated businesses performing professional services (such as independent contractors) that cross the $600 threshold in one transaction.
So there’s the win – less paperwork and more time to focus on your business! And there was much rejoicing.
(From Monty Python and the Holy Grail)