Business-to-business 1099 Requirement
Due to new 1099 requirements for business-to-business transactions, small business will be bogged down with more paperwork in 2012. Section 9006 of the Patient Protection and Affordable Health Care Act changes the requirements for the preparation of 1099s. Now corporations will no longer be exempt from receiving 1099s and all purchases of goods must also be included, not just those over $600. This means for every cash or check transaction (credit card transactions are exempt) small businesses must obtain the vendor’s federal tax ID number (FEIN) and deliver a 1099 to every vendor from which you purchased goods and supplies by January 31, 2013.
Healthcare Costs Reporting on W-2 for 2011
1099s aren’t the only thing the IRS changed. W-2s have also changed for 2011. Employers no longer have to include healthcare costs in Box 12 on the W-2 form (the deductions in wages that were non-taxable). This may result in some confusion when the employer or employee looks at the W-2 this year. The boxes may not add up to the number that appeared as net wages on the employee’s W2 for 2011.
Pay attention to the instructions on IRS forms, even if you think you know what they say. They are always changing!
