It appears from the Health Care Reform legislation that was enacted last year, we have to start issuing 1099s to corporate entities beginning this year.
Since all my professional property managers had been corporations, I never had to issue them a 1099 MISC for the property management fees I paid throughout the year. That has now changed.
That won’t start until the 2012 tax year. See: http://www.thestreet.com/story/10813064/new-1099-requirements-for-b2b-transactions.html
And even then, both the Dems and Repubs want to kill that part of the bill. See: http://www.pjstar.com/opinion/spotlight/x719609039/In-the-Spotlight-Health-bills-1099-clause-a-burden-on-businesses-has-to-go — there are quite a few other articles out there too on that.
So there’s a 90% chance that requirement will be gone before the end of 2011, and we’ll probably never see it. Thank god!
What starts in 2012?
For 1099s reporting 2011 payments, the IRS filing deadline is Mar 31, 2012.
Any clarification you can provide will be helpful.
Well, you said “It appears from the Health Care Reform legislation that was enacted last year, we have to start issuing 1099s to corporate entities beginning this year.”
This year is 2011. But you actually don’t have to start issuing 1099s to corporations until early 2013, for the 2012 tax year. It does not apply to the 2011 tax year.
The Patient Protection and Affordable Care Act requires all businesses, tax-exempt organizations, and government entities to issue Form 1099 to all vendors (including corporations) from whom they purchased goods totaling $600 or more starting in 2012. But, payments made using credit cards (subject to the above) will be exempt.
But even then there is a high probability that won’t happen since both houses of congress want to cancel that particular reporting requirement.
I was mistaken about the legislation that actually established the implementation date. My tax consultant tells me that Section 2101 of the 2010 Small Business Jobs Act supplemented provisions of the Patient Protection and Affordable Care Act to specifically require rental property owners to start issuing 1099-MISC forms to anyone who provided services to the property – effective this year. Here is a link to the text of the legislation.
http://finance.senate.gov/legislation/details/?id=da799068-5056-a032-5229-92cebbd2b7a0
Fortunately, the US House and Senate passed HR4 this week which repealed this provision in the 2010 Small Business Jobs Act as well as the 1099 requirement for corporations in the Patient Protection and Affordable Care Act.
Essentially, Congress restored the 1099 status quo.