Discussion:New 1099 Requirements
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Discussion Forum Index --> Basic Tax Questions --> New 1099 Requirements
Discussion Forum Index --> Tax Questions --> New 1099 Requirements
| 28 May 2010 | |
| I tried to find the last post regarding this issue, maybe Trillium can help.
"When the owner or tax practitioner fills out the business’ tax return, they will segregate the credit/debit card sales from cash sales.." "So, whenever a business uses a credit or debit card, there will be no new burden under the new law." TexCPA 11:42, 28 May 2010 (CDT) | |
| 28 May 2010 | |
| It's here, Tex: Discussion:Health Care Credit and new 1099 requirements, and kathyt did post an excerpt of the remarks about this credit card vs check issue - but I don't think we had the link before; thanks! | |
| 28 May 2010 | |
| Good question Tex. I really don't understand that statement. It seems that there will be a new burden under every aspect the new law, so how is it that they can state it isn't intended to create a burden? Will there be several sales accounts to identify the type of payment? Sounds like this is the answer.
I am hopeful but doubtful that there will be some correction to the bill to fix all of these onerous issues. The bill says the 1099s are effective for 2012, so we don't need to be doing this now for 2010, but is it for 1099s issued Jan of 2012 (2011 year) or effective for 2012 and thus the 1099s filed 2013? Every time I read the new Act I get a raging headache.... probably from clenching my jaw trying not to scream and alarm family & neighbors. | |
Death&Taxes (talk|edits) said: | 28 May 2010 |
| From RIA encapsulating the remarks:
"This new information reporting requirement applies if businesses pay a single entity $600 or more per year in aggregate for these types of transactions starting in 2012. Businesses do not need to file information returns on these payments until January of 2013." | |
| May 28, 2010 | |
| Seems to me that this is a big boon to banks and credit card companies. It may actually be cheaper to use credit cards to purchase things rather than paying in cash due to tax compliance issues from using cash and checks now. Meanwhile the banks get 3% of all purchases in order to cover their expenses in the reporting. | |
Actionbsns (talk|edits) said: | 28 May 2010 |
| If we let them just keep thinking, pretty soon they'll think us into a huge box of unnecessary paperwork and potential penalties for non compliance. I find Shulman's remarks on information returns really disturbing. How can he and his department stand there and with a straight face tell us their ideas are not creating an unnecessary burden? Clearly they've never spent a January hustling to get a thousand pieces of paper calculated, prepared and into the hands of a client prior to a stated deadline, that number alone will increase substantially. I'm thinking of the books of several of my clients and how do I tell them to separate out cash and credit card sales in QB when they already find it cumbersome to just get the information in there. And then, in order to give us a break, we might not have to send a 1099 if purchases were made using a credit card or debit card? Who keeps records like that? | |
| 28 May 2010 | |
| You mean separate out the types of payments, not sales. Right? | |
| 28 May 2010 | |
| And what about those who still use pen & paper. I have a few non technologically savvy clients. Or they have the software but haven's set it up. | |
CathysTaxes (talk|edits) said: | 28 May 2010 |
| I can see the IRS getting a lot of penalties for late filing. My clients are procrastinators. I'm lucky if some of them give me their info by April 15th! | |
| 31 May 2010 | |
| From Shulman's remarks:
"We plan to use our administrative authority to exempt from this new requirement business transactions conducted using payment cards such as credit and debit cards. These transactions will already be covered by reporting requirements on payment card processors, so there is no need for businesses to report them as well. So, whenever a business uses a credit or debit card, there will be no new burden under the new law." So exactly how would that work? A merchant is going to report my credit/debit card transaction with my business fein to the IRS? What if I use a personal card for business expenses? What if I required my employee to use their personal credit card and I reimburse them? A 1099 isn't required to be issued to the employee. I thought the credit card reporting was going to report gross sales to a merchant and to the IRS, not report individual transactions with tax id#s. How would that get linked to whether or not its a business purchase? So now I have to know who's tax id# is associated with the credit card my client uses? And track that certain purchases are reported by the merchant and others aren't based on which credit card was used? I don't get it. | |
CathysTaxes (talk|edits) said: | 31 May 2010 |
| TTMM, I am interpreting that excerpt to mean since there is an audit trail of debit/credit card purchases, then reporting these transactions on 1099s would not be needed. Only cash or check purchases would have to be reported. | |
| 31 May 2010 | |
| Thanks for that. So the IRS auditor that just disallowed my clients office supplies expense because he couldn't verify that the credit card used was actually her credit card should listen to his boss. | |
Tampa Taxman (talk|edits) said: | 4 June 2010 |
| What about payments to nonresident aliens who don't have social security numbers or ITINs? What is the impact going to be on foreign trade? | |
