Health care law's massive, hidden tax change

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

I think we have another major issue in government to grapple with. For years now, we have seen, (and often missed) the passing of a good bill/law used as a way to sneak one or several unpopular or detrimental provisions or additions through. It is as it appears, an underhanded way to pass agendas that are not subjected to the limelight and often eclipsed by the main provisions of a bill. So a win can be packed with a stealthy loss and even escape our scrutiny or any national debate.

Well, yeah, I realize that there is not much national debate and those who represent the corporations and special interests ... I mean ... ah ... represent us don't really want to bend to the vox populai, but they are playing us with this tactic. If this report is correct, the idea is to increase revenue, but the paperwork and targets seem absurd and typically bureaucratic. I am sure that many independent contractors and small businesses are not going to like this and will be affected negatively. The reach to squeeze tax funds out of stones continues.

I would prefer that future bills be constricted to a reasonable criteria that assures that either the semi-related additions to a bill part of the naming, e.g., The health care and tax reporting bill, etc., or that there are tighter restrictions to the scope of bills presented for the sake of clairty and understanding for those who support or oppose a bill.

The example in the article shows us that even a great bill that we support can carry some bad viruses which can bring unexpected negative impacts along with them. This seems to be getting out of hand now and if we could demand something it would be that this examples shows that the stealth provisions are unrelated enough to be a separate, tax-related bill. It just makes sense to me.

Oh, but wait, the people who are piggy-backing stealth tar-balls on popular and important bills make the laws and would have to ... oh, never mind ;)

there are so many taxable transactions that never find there way to tax returns because there is no documentation of the transaction.

All the "off the book" transactions that people get should be taxed. In this day and age of computerized accounting systems for even the smallest mom and pop shop costing less than 100 bucks and easy enough for almost anyone to use, there is no excuse for not reporting your income.

We are all screaming about the deficit and where will we get the money, well, here it is...

That's who this will impact the most heavily, not the major corporations who already have systems in place that do nothing but handle paperwork, it will add to the paperwork burden of those just scraping by.

to do, and being able to account for your business.

You see this is where I differ from most people. The law is the law and just because you are one of the mythical "little guy" does not make it any different.

If you are in business and have been skirting the law by not paying taxes you should be judged and abide by the rules of the game.

The magnitude of a persons diligence and responsibility does not end just because you don't make a certain amount of money.

And if you are operating a business correctly, filling our 1099's should be pretty easy.

You can get QuickBooks for under $ 200.00, W-2 and 1099 software for about $ 50.00 and computer ready forms for about .50 apiece. If you keep good records it should take no more than 20 minutes or so per 1099.

And what about the people who are playing by the rules, why should they be taxed while the guy operating say a carpet installation "side" business not have to pay or keep records.

Being fair is what I thought Democrats were all about.

How about torturers who will never be prosecuted under the law as they should be?

We have a two tier justice system in the US that falls heavily on the poor and middle class and far more lightly on the well connected and the wealthy, this ruling will just make those tiers a little more lopsided than they already are.

but the laws and enforcement are heavily skewed towards helping large corporations and wealthy people much more so than the little guy. They have the ability to hire expensive tax attorneys to find every loophole possible.

The little guy on the other hand, has only a choice of lube.

wages paid. I don't get why they'd have to be issued just because you bought goods or services from someone or some company. That makes no sense. I'm starting up a small business of my own. Does that mean I'll be issuing a 1099 to the furniture store I just bought my office furniture from? And that's just a start. I'll probably be spending more than $600 at the office supply store each year.

Aren't most of those transactions taxed already?

other accounting system, and all you'll have to buy is some forms, your software will generate the info.

That they were for reporting income paid to non-employees for work performed.

if it would have een debated, the Pubbies would have shut ut down! You have no idea how many private contractors that many times are paid in cash, never report it as income! I happen to know several people doing just that! With a computer system that almost evryone uses, it's not going to be any big deal to generate some 1099's, and many of theose tax evaders will have no choice but to report ALL their income or get caught!

Before my company spends money at Lowes, Staples, Costco, Office Depot, etc I must get their taxpayer I.D. number. If I were the above listed companies I would not want to pass out my number to everyone who walks in the door.

The 1099's are for compensation for work or services not for purchases where you get a receipt.

So if you hire a guy to paint your house and pay him more than $ 600.00, you should report that payment to the IRS.

And if you are getting services that are "off the book", then you are running the risk that that person does not have insurance. If you guy is unwilling to do the work "on the books", then where else might they be cutting corners.

Just a thought.

I am well aware of what 1099s/1096s are.

And millions of service providers receive 1099s that do not have insurance. These are not related issues.

If a person is unwilling to report their transactions to the IRS, where and what else are they skimping on to get by. If it is a painter and they are injured while painting your house you could very well be liable and considered negligent. That's what I was pointing out.

I also understand that the IRS has not even looked over the bill and how it will be implemented. The IRS rules on how they will enforce the new law.
Thy could very well take receipts in lieu of 1099's from large corporations who have a computerized point of sale document but require you to provide a 1099 to the guy selling computers on the side.

It really is as simple as this; If you don't want to take the expense and your supplier wants to keep it off the books, then don't try to deducted that item on your income tax return.

I think I know as much about the actual subject as you do.

:shrug:

the inexpensive tools that are available.

As far as the insurance stuff, working off the books is legally dangerous to the worker as well as the person who hires that worker.

Again, I know more about the subject than you do. And, I follow all the regulations to a T.

BTW - when was the last time you purchased 1099s? They are anything but inexpensive. Its a racket now.

I quit purchasing 1099's, 1096's, W-2's, W-3's a long time ago knowing that I can order all I need from the IRS for free.

BTW, almost any small business owner can get all they need from the IRS for free.

Also, the IRS is looking to expand their electronic filing program for W-2's and 1099's.

And so tell me again, how do you know more about the subject than a professional tax preparer?

Granted, I have scaled back my work load in the last few years but I still do about ten small businesses each year. Some I do all the reporting for and others I don't.

The new reporting law applies to goods AND services. Literally anything you spend money on. This is a HUGE reporting burden on businesses. Just massive.

And it won't go into effect until 2012. The IRS will have a lot of time to tweek the enforcement of the law.

The law says it happens. Whether the IRS chooses to enforce the insanity is another matter.

All I said was they will make a ruling which is what the IRS does to any law passed and signed. The IRS, in it's ruling process, determines how it will be administered and ultimatly enforced.

I can't see how you were able to discern from my post that I believed that the IRS was making law.

to issue 1099's to every company they do business with? I still don't get it. I still thought that 1099's were for when you paid someone who did work for you, not for goods or services you paid for.

posting more about. Whyever they did this, it looks pretty bad, both WRT political motives and it's possible impact.