Walter & Shuffain, P.C.
Certified Public Accountants & Business Advisors
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On April 14th, 2011, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, also known as H.R. 4, was passed by congress to repeal controversial expanded information reporting on Form 1099 for certain business payments and rental property expense payments. The repeal is certain to reduce the burden placed on taxpayers, especially small businesses.
The additional 1099 reporting standards were introduced and included with the Patient Protection and Affordable Care Act that was passed in 2010. It required that businesses, charities and government entities file a Form 1099 when they make annual purchases aggregating $600 or more to a single vendor. This would have applied to payments made after December 31, 2011, and the filings would have been reported in 2013.
In September, 2010, Congress approved the Small Business Jobs Act of 2010, which required information reporting by landlords on Form 1099 of certain rental property expense payments of $600 or more in conjunction with their rental properties. The information reporting was not limited to landlords whose rental operations amounted to a trade or business. This would have applied to payments made after December 31, 2010, and the filings would have been reported in 2012. Landlords with activities that amount to a trade or business continue to be required to report payments of $600 or more to service providers.
The types of expenses that could have been subject to the reporting included payments made to craftsmen, such as plumbers, electricians and roofers. Also, payments for professional services, such as payments to accountants and lawyers, would have been included. The repeal will essentially reduce the burden on taxpayers.
If you would like more detailed information, please do not hesitate to contact us.