KYBOY Posted January 18, 2011 Share Posted January 18, 2011 Ah yea, we get to mail out our quarterly business taxes out tomorrow Don't you love tax time... Quote Link to comment Share on other sites More sharing options...
ciladog Posted January 18, 2011 Share Posted January 18, 2011 If you think filing your taxes is tough now be aware. A provision in the Obama healthcare bill requires ALL businesses to send out a 1099 to EVERY person, vender, supplier, utility company, big box store, gas station, and on and on, if over the course of the year, you paid them $600 or more and intend to write it off as a business expense. Starts this year, 2011. It used to be just subcontractors but now it's everyone. Now think about this for a moment. That means that you have to start collecting Social Security numbers and Federal tax ID’s from those you do business with. And you will have to give those numbers to anyone that pays you more than $600 and is in business. Don't take my word for it, call your accountant. Quote Link to comment Share on other sites More sharing options...
CurlyGeorge Posted January 18, 2011 Share Posted January 18, 2011 Glad I'm retired and this is just a hobby. :D Quote Link to comment Share on other sites More sharing options...
ThomasPowers Posted January 18, 2011 Share Posted January 18, 2011 My Grandfather used to be quite happy to pay taxes. As he put it, he had had so many years when he didn't make enough to pay taxes that he was overjoyed whenever he had a year good enough to need to! Quote Link to comment Share on other sites More sharing options...
bajajoaquin Posted January 20, 2011 Share Posted January 20, 2011 There's a breakdown in your logic. You don't have to give the information to "anyone" you do business with. Just those you intend to write off on your taxes. A big difference. Sell something to a client? He doesn't need your info. Pay a vendor for steel? You probably all ready have his relevant info. Get a super-bro deal from your friend? You're probably not documenting that one anyway.... The place it could get really sticky is restaurants. Entertain clients, and need to write that off on your taxes? If you're spending more than $600 at a single restaurant in a year as a business expense, then you'll probably need to fork over the info. More likely, it's designed to reduce fraud. Like back in the '70s or '80s, when the IRS started asking for SSNs of dependents that parents claimed on their taxes. In one year, it "eliminated" millions of kids in the US. The idea is probably to make people think twice about writing off all those lunches with the wife if the documentation is going to be more stringent. Quote Link to comment Share on other sites More sharing options...
ciladog Posted January 20, 2011 Share Posted January 20, 2011 It’s not my logic; it’s the law if it doesn’t get repealed. It used to be that if you hired subcontractors and paid them more than $600 in a tax year you had to send a 1099. Now you must send that to everyone you pay more than $660 in a taxable year if you intend to write off the expense. I never had to send 1099’s to my steel supplier or say McMaster Car or if I bought something at Home Depot over $600 but you do now. All bills arrogate to any one vender (or anyone) over $600 that you intend to write off on business needs a 1099. Starting in 2012 any one you sell a product to that is for rental property like a railing or a repair will also need your info. And let’s say you want to buy a forging hammer from someone here on IFI and you want to write it off on your business. You will need to send him a 1099 and he will have to report the income as a result. The reason for this law is to kill the underground cash economy period. Like I said in my first post, don’t take my word for this call your accountant and ask him if you file profit and loss statements for a business. Quote Link to comment Share on other sites More sharing options...
Guest Posted January 20, 2011 Share Posted January 20, 2011 I agree that this is good and needed information. Please remember this is also only related to members doing business with the States. Lets be careful how and where this topic wonders, avoiding political comment, and speculations about the "whys" and focus on what is happening, and how we will deal with it. Thank you Quote Link to comment Share on other sites More sharing options...
Fe-Wood Posted January 21, 2011 Share Posted January 21, 2011 I just got a letter from the Ca. Board of Equalization about a "use tax". It is being imposed on items bought form out of state where California sales tax has not been collected. My question on this is- what if I buy something from out of state, pay their sales tax, bring it home to California- Do I need to pay the use tax? Try telling the vendor "I'll be using it out of state or need to be taxed at my local tax rate".... I can see it now It would be to difficult to have a destination based sale tax as opposed to an origination based sales tax. Doing business just got WAY harder. Quote Link to comment Share on other sites More sharing options...
Steve Sells Posted January 21, 2011 Share Posted January 21, 2011 My Indiana State sales tax for the past year includes tax on my out of state sales. I have to pay it. :( Quote Link to comment Share on other sites More sharing options...
Dodge Posted January 21, 2011 Share Posted January 21, 2011 Glad I'm retired and this is just a hobby. I'm with you, Curly. I'm a full time hobbyist and don't make enough to pay anybody enough to matter. Even when my kids work with/for me, they pretty much just work for food and beer LOL $600.00 for food and beer?? Sounds like a party!! :P Quote Link to comment Share on other sites More sharing options...
son_of_bluegrass Posted January 21, 2011 Share Posted January 21, 2011 All states I've looked at (a half dozen or maybe 8 out of curiosity, 3 I've lived in) have had use tax and it has been in place for a long time. I don't recall looking at California but I imagine it has been in place for decades and is now being enforced due to budget problems. Also a lot of states are going to destination based sales tax with the idea of a nation-wide enforcement of sales tax. It is being called stream lined sales tax (I think). There is also a nation wide database being built to help with correct sales tax collection. For Kansas if I pay tax on something mail order from out of state that amount is deducted from the tax I owe. I don't know how California has worded their law. From a suit that went before the supreme court some number of years ago, no state can force an out-of-state retailer to collect sales tax for another state. Even if you asked to have tax added from someone out of state, he may chose not to and there isn't much you can do other than pay the use tax for California. Yes origination based would be much easier but everyone is pushing for national destination based sales tax. ron Quote Link to comment Share on other sites More sharing options...
Fe-Wood Posted January 22, 2011 Share Posted January 22, 2011 the use tax has been in place sence, yup you guessed it- the last de-repression.... 1935 Makes you stop and think AGAIN on how to work final cost. This could be something bad for internet based companies. But then I guess it will be good for brick and morter stores.... Quote Link to comment Share on other sites More sharing options...
ciladog Posted February 3, 2011 Share Posted February 3, 2011 The US Senate repealed the 1099 reporting requirement. Let's hope it gets signed into law.Link to story Quote Link to comment Share on other sites More sharing options...
HWHII Posted February 3, 2011 Share Posted February 3, 2011 I am lucky. My wife is a accountant. She takes care of all the buisness paperwork. Although she is not cheap. You should see how I have to pay her. :huh: Quote Link to comment Share on other sites More sharing options...
thingmaker3 Posted February 4, 2011 Share Posted February 4, 2011 Just out of curiosity... How many of you give the government a zero interest loan (you get a refund), and how many get a zero interest loan from the government (you pay them at tax time)? Quote Link to comment Share on other sites More sharing options...
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