New 1099 Requirements Repealed

On 14 April 2011, President Obama signed The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, which repealed substantially broader Internal Revenue Service (IRS) Form 1099 reporting requirements scheduled to become effective beginning in 2012 because of The Patient Protection and Affordable Care Act (PPACA) and scheduled to become effective beginning in 2011 because ofThe Small Business Jobs Act of 2011.

What is Form 1099-MISC?

Some payments totaling $600 or more for goods and services that are made in the course of a taxpayer's trade or business are required to be reported to the IRS using Form 1099-MISC. Payments not made in the course of a trade or business need not be reported.

The Patient Protection and Affordable Care Act (PPACA)

Prior the PPACA, it was necessary to issue Form 1099-MISC to independent contractors, e.g. sole proprietorships & partnerships, for goods and services they provide. Beginning in 2012, the PPACA required that Form 1099-MISC be issued to all vendors and service providers, including corporations, to whom payments totaling $600 or more were paid during a tax year.

The Small Business Jobs Act of 2010

Beginning in 2011, The Small Business Jobs Act of 2010 required owners of real estate used as rental property to also report payments totaling $600 or more for expenses associated with their rental properties.

What's Changed, Err, Not Changed?

The legislation enacted on 14 April 2011 returns the Form1099-MISC requirements to their pre-PPACA and pre-Small Business Jobs Act of 2010 states as if the neither law had been enacted.

This brief overview of some important considerations associated with IRS Form 1099 reporting requirements is by no means comprehensive. Always seek the advice of a competent professional when making important financial and legal decisions.

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