Attention ALL small business owners!
Our government, in attempt to conjure up more money to fund their expensive Health Care bill, has slipped a small line into this bill REQUIRING A MAJOR CHANGE in SMALL BUSINESS REPORTING starting next year. This change is going to mean small businesses like myself — other photographers and entrepreneurs will have the added burden of massive amounts of additional tax filing requirements.
They are asking something nearly impossible – to send a 1099 to EVERY vendor (including corporations and larger companies like if we buy products from Office Depot, B&H, Apple Computer, etc) that we spend more than $600 with. So if you buy a computer from Apple for $2000 you have to send them a 1099. If you spend $620 at Walmart buying office supplies in any give year, you have to send them a 1099! This is ludicrous!
If you are like me you have dozens, sometimes hundreds of suppliers. Imagine the cost and time involved in sending 1099s to everyone! Currently this is only required if we spend money on independent contractors providing services to our business (not corporations). If you thought keeping up with your books and accounting is difficult now, just imagine the horror it will be next year if this bill is not corrected.
The government is accepting feedback currently and ASMP has drafted a letter that proposes a better compromise to this change. PLEASE write and let them know it is unacceptable to pass this as-is!
Here’s the ASMP email letter you may send:
RE: Notice 2010-51
Dear Sir or Madam:
I am a professional photographer and a small business person. I have virtually no administrative staff to handle my record-keeping and reporting responsibilities. The new requirement under Section 6041 of the Internal Revenue Code would place impossible burdens on me. The exemption for credit card transactions was a great step toward reducing the impact of this change in the tax code. Unfortunately, it does not go far enough.
I often pay for computer and camera equipment, studio and equipment rentals, catering services, and other items by check or cash. Those expenditures often total more than $600 per vendor in any given year. Having to keep separate track of each of these items — and then to issue Form 1099’s to each vendor — would simply take more time than I have as the owner of a very small business operation, and it would require back office support that I do not have and cannot afford.
Please change the requirements so that they apply only to larger business entities, such as persons or entities that employ more than 25 people.
Thank you for your time and understanding.