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September 24, 2010, 12:50 AM | #1 |
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Implications of the over $600 form 1099 rule?
I am not real checked out on this,heard some on the radio.
as I understand it,maybe in 2011 if,in a calender year,we do over $600 business with anyone,a 1099 form must be submitted. Does that mean if I do $601 with Midway,I must inform the IRS,and if I buy a Leupold scope for $639 from Natchez I must send another 1099 and if I order a Fusion 1911 kit I must submit another 1099,etc. Is that true? Would anyone else be concerned about that? Seems like all these regs are making quite a tanglefoot of criminalizing decent folks. I sure hope I understand it wrong. |
September 24, 2010, 01:54 AM | #2 |
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I've just been reading about it, and it looks pretty ghastly.
But it only applies to businesses. So a business that buys over $600 worth of office supplies from Staples, must file a 1099. However, an individual who, in his private capacity, buys over $600 worth of gun parts from Brownells apparently would not. |
September 24, 2010, 05:26 AM | #3 | |
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My understanding has been that if I as a proprieter, pay a guy to mow the lawn, and over the course of a year that adds up to 600 bux....he gets the 1099. Meaning I have to create a record the first time....because I don't know at that point if it will add up to 600 or not. That is for labor. It has always been like that between any business and any individual or contractor.
What has changed is that now it is also for goods, merch, materials. If I as a proprieter buy an antique spark plug off someone for a buck, I have to create a file, in case I end up eventually buying enough from that person during the course of the year, that it might add up to $600. If it does....he gets the same 1099. So on my end it applies because I am a business, but who I buy from can be a individual, and they will recieve the 1099. The paperwork for an antique store, baseball card store, gun store etc....with walk in folks selling items...could be huge. Creating a file on each purchase(person), and having to review all end of the year, to be sure about the $600 total or not. And I need valid ID/address/SSN etc. in this file, to mail the 1099. I could be wrong, but I can cite an accountant's letter, so at least that was his understanding at the time. The only thing that changed, is that goods are to be done, the exact same way labor has always been done. And me buying paper at Staples or gasoline etc....has always been expensed w/ records kept, which is why I don't think that's what it's about....it's about individuals, just like the bill it is contained within. Staples and the gas station might be covered, but they were already in the book keeping on my end and they were already paying all their own taxes on their end. Seems covered already. Joe Blow the individual...was not. Gun show vendor ramifications? Here is another accountant's letter posted months ago by Wildalaska, maybe someone reads it differently. http://thefiringline.com/forums/atta...5&d=1269652319
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September 24, 2010, 08:00 AM | #4 |
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I'm not familiar with this.
Anyone have any links to the proposed legislation or commentaries on it?
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September 24, 2010, 08:03 AM | #5 | |
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It is healthcare bill, not "proposed". Don't understand it all yet but obviously I need another file cabinet at the minimum.
Commentary from Bloomberg Business Week. http://www.businessweek.com/smallbiz...526_855178.htm From CNN Money. http://money.cnn.com/2010/05/05/smal...re_tax_change/
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September 24, 2010, 10:46 AM | #6 |
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Good God!
I could see that forcing a lot of small businesses out of business.
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September 24, 2010, 11:03 AM | #7 | |
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That worse part is that you have to create a file because you MIGHT do over $600 in business. Whatever happened to the whole save the trees thing? And I, too, want to know about how this will effect gun shows.
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September 24, 2010, 11:09 AM | #8 |
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I have been a contractor on and off for years. I get 1099's for them and pay my taxes.
How could this possibly be good for anybody except the tax preparers and I guess the government people who will have to deal with and use all this information. One of the articals said it would generate 35 Billion in tax revenu. Even if that is true it is 35 billion taken out of the public sector and added to government coffers but at what cost. It sounds like a loose situation for the rest of us. I guess "Big Brother" is getting bigger and stronger. Is the goal to eventualy record every transaction made in America? Scarry, James
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September 24, 2010, 11:33 AM | #9 |
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Oh boy now I can't wait to go through the supermarket check out lines. I can see wallieworld at Christmas. Who thought this was a good idea?
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September 24, 2010, 11:43 AM | #10 | ||
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Evidently this provision's repeal is being used as a carrot on a stick to get other legislation passed so I doubt it is over and done yet. From an individual's blog comment posted on the above linked Bloomberg article.
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Gun show vendor trip generated files: Venue fees Hotel Restaurants(6) Gasoline(2) Boony-hat camera vest guy I bought a pocketknife from Flat tire repair
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September 24, 2010, 12:12 PM | #11 |
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I don't like it, but as a former tax auditor (just state not IRS), i understand why they want more "paper trails" to follow. As an accountant in a small public accounting firm with some seriously unhappy small business clients, i am not a big fan of this methodology for obtaining that paper trail.
I would recommend any small business owner still mired in the dark ages of paper record keeping spend a hundred bucks or so on some decent accounting software. You could use a program like Quickbooks to both write and record your checks at the same time; quickbooks will be able to give you a report with total purchases from each vendor. It is fairly simple to use a program like Quickbooks; sometimes your CPA may be able to get it for you at a discounted rate, especially if you pay the CPA to brief you on how to use the software. Edit* QB and other similar software can be an even bigger help with payroll duties. It isn't the end of the world, but i would prefer the feds chase tax cheats another way. From what i hear at seminars, it will not end up being implemented as passed/snuck. Just My Opinion, no offense. Last edited by orangello; September 24, 2010 at 12:28 PM. |
September 24, 2010, 12:19 PM | #12 | |
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Create laws folks CANNOT realistically obey 100% and criminalize them... That will go over like a lead zeppelin! Brent |
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September 24, 2010, 12:27 PM | #13 |
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Actually, there's nothing new to making laws that we can't possibly follow.
Read this book: http://www.threefeloniesaday.com/
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September 24, 2010, 03:13 PM | #14 |
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I think the big problem is not that businesses are going to have to collect the data on expenses, they do that anyway, but they are going to have to get all the tax numbers and SSNs, then have the extra step to fill out the 1099's themselves. I have not been in a position to have to do those for a number of years but I did have to fill them out by hand. I had to send a copy to both the IRS and the individual (all my 1099s were for labor provided to a local band booster org). I can see the joy at Staples as thousands of 1099s appear in the mail box Not to mention the thousands of calls coming in to find out what the ID number is and where to send the forms. What happens when those same thousands of people make mistakes and suddenly Staples has $20,000,000 in 1099s show up for $18,000,000 in sales.
Have things changed so that small businesses can file these things electronically, I know when I had to do it I was not big enough to do any sort of electronic filling. |
September 25, 2010, 07:00 AM | #15 |
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I can see the scenario where you trade or sell that nice Python to a dealer for $1,500 and the dealer files the 1099. The IRS then turns to you the seller and says, "You've got $1,500 undeclared income." Now, you may or may not have records documenting the acquisition price in order to cut down on tax liability. But, assuming you still have that receipt where you paid $200 for it 40-50 years ago, you now owe taxes on income of $1,300. That's how health care is going to be paid for.
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September 25, 2010, 01:08 PM | #16 |
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How to say this without going too far,,
This is one issue that came out of the first provisions of this bill.There are 2400 pages. If it occurs that we discover more provisions that will be harmful to the free excersize of our 2nd Amendment Rights Given that today I heard some poll results showed 62% of Americans favor repeal of this bill... Do we really have to rely on Congress and the White House? Can the Ballot Initiative process allow the citizens to just say NO? |
September 25, 2010, 01:44 PM | #17 |
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What if they pass a law and everybody ignores it?
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September 25, 2010, 01:56 PM | #18 | |
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.... and you can bet your butt that if you are buying and selling firearms, you are NOT on the "favored" list..... that makes you a target. |
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September 26, 2010, 07:02 AM | #19 |
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Create laws folks CANNOT realistically obey 100% and criminalize them... That will go over like a lead zeppelin!
There is an obscure reference. I am not likely to just hand over my SSN to some guy wearing a camera vest and a boonie hat. Things are getting pretty messy out there. By creating this patchwork of laws that no one can understand, the likelyhood of people being put under the governments thumb increases.
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September 26, 2010, 09:17 AM | #20 |
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The same bill provides for 16,000 new IRS agents to "help" us.
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September 26, 2010, 10:13 AM | #21 | |
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September 26, 2010, 05:54 PM | #22 | |
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September 26, 2010, 07:03 PM | #23 | |
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From the viewpoint of a someone trading a firearm into a dealer, it might be worthwhile to structure it so that the trade-in value is less than $600 so there is no 1099 reported. You might have to pay a few bucks more for sales tax, but it won't be at a 20% rate. Of course, the trade-in value has to have some relationship to reality. |
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September 26, 2010, 11:49 PM | #24 | |
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September 27, 2010, 07:22 AM | #25 |
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Which part? the 16,000 agents or that they will help us?? (sorry - couldn't resist)
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