They better fix this - or Obama might lose my vote next time around

[NJGeek]

I was reading this article

http://online.wsj.com/article/SB10001424052748704518904575365223062942574.html?mod=rss_opinion_main> from the WSJ.

I am always skeptical of the WSJ, however I couldn't ignore this:

Ms. Olson also exposed a damaging provision that she estimates will hit some 30 million sole proprietorships and subchapter S corporations, two million farms and one million charities and other tax-exempt organizations. Prior to ObamaCare, businesses only had to tell the IRS the value of services they purchase. But starting in 2013 they will also have to report the value of goods they buy from a single vendor that total more than $600 annually—including office supplies and the like.

Democrats snuck in this obligation to narrow the mythical "tax gap" of unreported business income, but Ms. Olson says that the tracking costs for small businesses will be "disproportionate as compared with any resulting improvement in tax compliance." Job creation, here we come . . . at least for the accountants who will attempt to comply with a vast new 1099 reporting burden.


If this is true, I couldn't possibly support any administration that didn't moderate these provisions through regulation. I almost have to believe it was thrown in there by accident or mistake to not feel betrayed. As a small business owner twice over, I couldn't imagine having to worry about complying with goods reporting. Mid-size and large enterprises will have no problem, of course, but the small guy will. This is a job killer and a big smack in the face to the small business owners out there that supported Obama and Democrats. The far right will use this as well against Democrat and President Obama.

[Better Today]

1. Unless these businesses are completely bookkeeping illiterate, this is a very

easy report to pull off nearly any bookkeeping software. Ms. Olson is simply incorrect as to the problems this will cause or the expense to pay accountants. Any decent bookkeeper, that most of these small bizes and charities should have, will have no problem giving this report to their CPA or directly to the IRS.

Over the years I've known dozens of "vendors" who take the checks issued them and don't report the income to the IRS, so this seems more than acceptable, why only pick on 1099 subcontractors for services, why not "vendors"?

[NJGeek]

8. Bulls***

You still cant even file 1099's for services vendors electronically. In 2010. Get your facts straight - small businesses will be burdened in a big way by this. Especially those who buy from a variety of vendors like artisans.

[Better Today]

13. What does electronic filing have to do with anything? The data should be available, reports are

easy to pull, and just because some forms need to be filled out, does NOT equal a huge burden. If you're dumb enough to get sucked into this bullshit republican talking point, feel free. I won't be. I began doing bookkeeping back when we used pencil and paper, then graduated to pegboard bookkeeping, then into minicomputers, and finally into the whole current Quickbooks and Peachtree, etc. Any bookkeeper that can't or won't handle this easily isn't worth shit.

[Nicholas D Wolfwood]

23. +1

My dad owns a small business. He'd be able to tell you within minutes how much he spent at a single vendor for any duration over the last 20 years. It's really not that difficult.

[Whisp]

37. thankyou!

I am about fed up with this hysteria anything anti admin.

thank you for your service.

[quiller4]

51. Quickbooks makes this reporting a really simple matter.

Tracking purchase by vendor for small businesses is a matter of a few key strokes. It takes less than 5 minutes to set up the report for regular reporting.

[Better Today]

2. Yep, after a quick google of "ms. olson," I'm assured that she's just a nut with an agenda.

She's trying to hype this into something it's not. Yeah, it should catch folks like one of my ex-clients that pocketed tens of thousands each year in off-books transactions that he had clients write checks directly to him, but it isn't an accounting burden at all.

[Richardo]

29. First clue: The use of the term "ObamaCare"

You won't see that from a credible or objective source.

[Gman]

3. You're supposed to be sending 1099's to venders from whom you purchase

more than $600 right now anyway. This is nothing new.

So just who would you vote for instead?

[NJGeek]

10. Not product vendors (goods)

So now I'll have to report my Staples purchases in a 1099 to the IRS? That's a great use of time and effort.

All of this stuff is already reported on the schedule c or corporate return. This is simply adding burden.

[Better Today]

14. Aw, poor baby, I guess people that sell their products and lie about their income

should get a pass. Usually, corporations are excluded from this, as I imagine it is here, though the OP doesn't say for sure. You don't send 1099s when say the Geek Squad at Best Buy helps you with your computer issues, even though that is a service and often over $600. 1099s and I imagine this as well are for those that are not incorporated, like sole proprietors and some partnerships, no big deal and needs to be done. I've done enough bookkeeping to know how many of my clients do exactly what the IRS is trying to stop. One guy in particular, a window and glass guy, would have his B2B transactions go through his biz, and all purchases, but any sales to individuals he had them give him a check to his personal name and would remove the windows from inventory by claiming they were broken in transit. He made over $85,000 in un-reported income the year I worked for him, his reported income was $100K, so nearly 50% of his real income was hidden and never taxed.

Again, if you are dumb enough to promote this bogus republican perspective, and not vote for a dem because of this, you're none to sharp.

[Milo_Bloom]

42. Wow, what an insane perspective.

So you punish business 1, because business 2 MIGHT be breaking the law.

What's funny is that someone even remotely determined can get around this in about.. oh 5 seconds.


Here is how you glass cleaner can do it.

Rather than having 1 DBA, open 4 and specialize the businesses. The people who were willing to write him an individual check obviously knew what they were participating in, so instead of 1 check, you write 4 checks to 4 different businesses and poof.. not more than $600 to a single merchant and the same scam continues. Need higher amounts? More DBA's. You can get free online checking accounts, so it won't cost you anything to maintain extra accounts and you will still be able to EASILY pull off your tax scam.

In short, the new rule burdens those who deal honestly and adds a TINY hurdle to those who want to cheat.

[Gman]

26. But it damn sure isn't enough to not vote for Obama

I understand the frustration, but that's getting pretty petty. Even if so, what would it be? Two or three mouse clicks in Quickbooks, then click "print"?

[napi21]

4. That's crazy. I had a small business selling items on ebay, and

I had no problem tracking who I bought things from & how much, by DAY let alone by year! You don't even need business software. I used an excel workbook! I don't know anything abut Ms. Olsen, but she's very wrong on this one.

[NJGeek]

11. Did you have everyones EIN or taxpayer ID that you bought from?

What if you buy from foreign providers?

It's a good point you bring up only to reveal that it would be an eBay killer. I know they don't like Meg Whitman but this is ridiculous.

[napi21]

15. No, and I doubt I'll have any problem either. What they're

after is the business that is selling, or supplying things and not reporting anything. Larger co's wouldn't matter because even if theycompared your filings to what the co reportd, there would be so many smaller buyers there would be nothing to flag.

BTW, when I said I meant SMALL! I may have purchased over $600 from only 2 suppliers, and one was a very large internationa co.

[Milo_Bloom]

43. So you are just going to ignore the law and not worry about it...

... because you reason they aren't after you anyway.

Wow... just... WOW!

[Kahuna]

18. Oh brother. Give it up already. nt

[boppers]

5. Dude, it's *totally* in your benefit to itemize out all your purchases, especially in a small biz.

I'm guessing this will actually backfire, and people will be shocked at how much *less* people pay in taxes once business expenses are taken off of their taxable income.

[davidinalameda]

6. shouldn't someone running a business

have all this information anyway?

wouldn't you know to whom you've written checks to over the year and where you've purchased stuff from?

[vaberella]

27. That's what I wanted to know and all the posts seem to suggest yes, they should. n/t

[Milo_Bloom]

41. No.

There is a difference between saving receipts and collecting EIN's from every merchante with whom you do more than $600 in business.

I buy my office lunch every friday. This provision would mean that I would have to 1099 the places we buy lunch from! Not just collect receipts and report it, but actually have a 1099 filled out for each individual place.

Luckily, like most of the legislation out of this administration, the provision has absolutely no teeth and a loophole you can drive a truck through, so it can basically just be ignored.

[Hekate]

7. "Democrats snuck in this obligation...If this is true, I couldn't possibly support..."

>sigh< NJGeek, you need to dig much deeper than this one article, which is published in a paper now owned by Rupert Murdoch.

Use of phrases like "Democrats snuck in this..." indicates more than the usual DUer distrust of all authority, and points instead to a specifically RW meme, as does "If this is true, I couldn't possibly support any administration that didn't moderate these provisions..."

IF this is true? Somehow I almost have to believe you really know it isn't so.

Thanks for your concern, however, and best of luck in your small business.

Hekate

[NJGeek]

12. Yeah too bad it's true though

http://www.tasbo.org/resources/business-news-list/261-proposed-irs-1099-reporting-rule-comments-due-by-september-29

[Kahuna]

20. What makes this source any more credible than the first one?

:rofl:

[frazzled]

9. It's an editorial, not an article, and it uses the term "ObamaCare"

What more need we say.

[Hekate]

16. "ObamaCare"? ... that explains a whole lot, she said alertly.

:evilgrin:

[Political Tiger]

19. Don't ya just love how people take right-wing editorials as fact?

Come on people, THINK!!!!

[Hekate]

36. Aww. What an adorable.... graphic.

[Kahuna]

17. "ObamaCare?" I'm surprised she didn't sneak in a "death panel" discussion.

:eyes:

[PBS Poll-435]

33. Honestly, I am shocked there isn't a COLB reference.

"If he can't show us the long-form, I ain't filin' no 1099s"



:rofl:

[rucky]

21. Well, Republican administrations do tend to be more lax about accounting.

So sitting out would help.

[JTFrog]

22. Worried about what the far right will use, but can't ignore an article that uses racist rw labels.

And now he's lost your vote.

Logical and definitely, shall we say, useful. :eyes:

[Nicholas D Wolfwood]

24. That reporting will take exactly 5 minutes.

Seriously, any bookkeeping software will be able to generate that report instantly. I've helped my dad run his small business since I was a child, and there's no way he wouldn't be able to tell you within minutes how much he spent at any particular vendor.

Either you're a shitty business owner or you're making a mountain out of a molehill for no good reason. I'm thinking both.

[zipplewrath]

30. Amex

I think Amex is pushing some "service" like this. You purchase your good with their business credit card and they give you a year end report showing where you spent all your money. Quicken does something like this too. I suspect some banks probably offer it as part of a business account. The hard part would seem to be filling out the paperwork.

[Whisp]

38. I'd say a shitty molehill maker.

:rofl:

[sadbear]

25. Two million farms?

I guess my backyard vegetable garden counts as a farm then.

[vaberella]

28. This is a red herring to build up more Teabaggers. It's like HCR has death panels.

WSJ is full of lies.

[PBS Poll-435]

31. Lolz²

:rofl:

[NoSheep]

32. You've fallen right into the trap.

[tranche]

34. I pointed this out a couple months ago. Your post smells like an Obama tantrum however.

As far as this provision goes there's actually an R on it. I'm hoping this be fixed in congress. I'm not going to withhold my vote for Obama over this though (jeezuz rolling eyes).

[Sheepshank]

35. I'm sure you'll search high and low

and finally find something you can hang you hat on, to put your vote elsewhere. Since it's clear you don't want to vote for Obama (just hunting for the justification), care to clarify where else the vote will go?

[Milo_Bloom]

39. It IS a nightmare, BUT credit card purchases are exempt!

http://money.cnn.com/2010/07/09/smallbusiness/irs_1099_flood/index.htm

Anyone who tells you this is easy, doesn't know what they are talking about. (I own 4 small businesses and this idiotic rule would be nightmarish).

However, they are going to exempt all credit card / debit card transactions (since they are already reported through merchant banks).. so, do what we do and just make sure ALL goods are paid for with credit cards.

[NJGeek]

44. Great way to line the pockets of the CC companies

Maybe this was the quid-pro-quo for the credit card "reform" bill they passed.

Now all of my suppliers will have to pay 1-3% vig to the bank just to take my money.

Bass Ackwards.

[Milo_Bloom]

45. Yeah! It's gonna hurt some businesses for sure!

I really don't understand the need for the rule, since it is so easy to get around for someone mildly determined to partake in tax fraud and just winds up a huge hassle to small businesses and people being honest.

Hopefully this section of the bill gets repealed.

[BootinUp]

40. This whiny thread still going eh?

I have nothing else to add to it. lol.

[nyc 4 Biden]

46. i stopped reading after "Prior to ObamaCare..." n/t

[POAS]

47. HA.....I stopped reading after

"I am always skeptical of the WSJ, however I couldn't ignore this:"

[Milo_Bloom]

48. Such a shame you close your mind.

The reality is that this is real and could be a BIG problem.

Luckily, this particular regulation looks like it will be repealed and/or applied in a way so that no one has to comply with it.

[FrenchieCat]

49. First of all, your accounting system should be tracking this already.....

and this provision is in reference to 1099 reporting, something that has been in force for a long time already and now, business have to report on the various health insurance payments they make, in order for the Government to track how much in premiums individual business pay.

If this is a deal breaker for you, than that is really sad....considering that even Quickbooks will track individual vendor purchases as they are entered in! The only thing one has to do at the end of the year is print out the 1099s and send them to the Government. :eyes:

[Milo_Bloom]

52. Uhhh.. no.

First, this hasn't been in effect for a long time now. The current rule does not require you to 1099 any incorporated business (which is the vast VAST majority of businesses) EXCEPT If you pay a lawyer or doctor's corporation directly, then you need to 1099. Not "health insurance payments" it has to be the service provider themselves! So the vast majority of payments that most businesses incur do not require this additional paperwork/step.

Let's put aside that most small businesses DON'T use quickbooks (none of the ones I own do).. even quickbooks doesn't automatically collect EIN's. This requires you to have every company you do business with fill out a W-9 before you can purchase anything.

And no, the 1099's don't just have to be "printed and shipped to the government", they would need to be itemized on a form 1096.

So if you are like me and literally purchase goods from hundreds of different incorporated vendors throughout the year, you are looking at potentially THOUSANDS of pages of additional paperwork (each vendor filling out a W-9, plus having to 1099 that vendor and have that 1099 compiled to a 1096), keep in mind this would all have to coordinated through an accountant, who would get to add about 10 hours to their bill just to compile all this additional paperwork.

So what goes from being a 1 line item deduction (office supplies), which can be quickly calculated from Quicken or Microsoft money (before it vanishes forever in January), becomes an ordeal of collecting W-9's compiling 1099's and further reporting them on a 1096.


What is very sad about this thread is the number of people who live in denial on this stuff and flail defending anything.

Is this in and of itself a reason to or not to vote for anyone? No.

However, it is an example of INCREDIBLY SLOPPY work on the part of the legislatures.

[Name removed]

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