Tuesday, July 20, 2010

Surprises From Congress and the IRS for Small Business

I'm still glad I read old fashioned papers like the Wall Street Journal. Last week an editorial alerted me to a new hidden burden in the ObamaCare legislation. Approximately "30 million sole proprietors and subchapter S corporations, two million farms and one million charities and other tax-exempt organizations" will have to report to the IRS the value of goods they purchase from a single vendor that total more than $600 in a year. This means ink, paper and other office supplies. Business entities already are supposed to tell the IRS about services they purchase that equal at least $600 from a single vendor, using the 1099 forms.

I'm familiar with the this, since my clients send me 1099s that report the value of my writing and planning services to them. But I'm wondering now about the headaches for all small organizations to not only keep track of all purchases they make from specific vendors, but also to send all that paper or electrons to the vendors, as well as the IRS. Bookkeepers can earn more money. And 1099 services can, too. Can you imagine Apple, Staples and Costco receiving all that reporting as small businesses file their forms for the goods they purchased over the course of the year? That should make all their goods increase in price.

And what about the increased expenses for the government to keep track of all this reporting? According to the Journal, even Democrats are complaining about the new burden.

If you're wondering what the IRS expects your business to report now, take a look at www.irs.gov. The information is all there. What isn't there yet is all the fine print hiding extra costs, regulations and reporting created by ObamaCare. 

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