1099 Reporting is Changing

The Patient Protection and Affordable Care Act of 2010 (PPACA), has become law.  A portion of that law few people know about has the potential to create a paper work nightmare.  It will increase the mandatory 1099 reporting for virtually every business in the country. Previously, a businesses had to file a 1099, with the IRS, only when payments were made for service, to a non incorporated person goods or merchandize excluded, in excess of $600 for that tax year.

 When the new provision takes effect on Jan. 1, 2012 this definition changes. The definition that a person includes any corporation that is not an organization exempt from tax under section 501(a). The new language will mandate 1099 reporting for purchases of property. So with the exception of tax-exempt corporations any business that buys more than $600 in merchandise or services from another business will be required to provide a 1099 form to the IRS.