In an era of almost daily bad news, especially for those of us who work in housing or real estate related industries, we who are small business owners finally do have something to celebrate. Today the Senate voted by 87-12 to repeal the 1099 provisions of the Affordable Health Care Act (Obama care).
The 1099 reporting provisions of Obama care were designed to help fund the health care bill by providing $22 billion in tax revenue over 10 years. But in reality, the 1099 reporting requirements created a climate which would have pushed corporate spenders to consolidate their business purchases as much as possible into a few large vendors in order to reduce their paperwork since for each business expense totalling over $600.00 in one year, the business claiming the deduction would have to provide a 1099 to the vendor. This would mean that companies spending over $600 a year on entertainment and meals would need to provide 1099's to the restaurants where they ate; companies which pay gasoline expenses of greater than $600.00 a year would have to furnish 1099s to each station where they purchased fuel, etc, etc and so forth. And since in order to meet the filing requirements for a 1099, the business preparing the 1099 had to have the vendor's tax payer ID number, this promised to be an administrative nightmare.
We know that a particular bill is really bad when the IRS is actually trying to think of ways to minimize its impact. And so last year, after Obama care passed and the business community became aware of the terrible impact of the 1099 reporting requirements, the IRS commissioner offered to help the business community by exempting all purchases made with credit cards. That's when we knew that they were not looking forward to sifting through mountains of paperwork any more than we were looking forward to trying to prepare it .
The House passed legislation repealing the 1099 reporting requirements in March. The president has indicated his willingness to sign the bill when it reaches his desk. So it looks as if we finally genuinely have a reason to rejoice.
Now if we could just get rid of that Dodd-Frank bill.
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