Update on the (hopefully no longer) upcoming 1099 change.

I haven't had time to photograph or post last week's candle batches yet, due to a very busy last two weeks of summer, but did want to take 5 minutes to post a little update on the 1099 reporting change I wrote a blog post about in May. I read an excellent summary of the current status in this article today. It seems that nearly all business owners are in agreement that the increased reporting requirement places a ridiculous burden on small business owners. How do you get the tax information of businesses where your employees spend money while on the road? How do you figure out who to contact from a national chain store? How can you add the added cost of all that tax reporting time into your product without loosing all your customers? But, probably the most pertinent question is... how is the IRS going to handle the millions of additional papers they will have to process each year and make money to pay for the health care bill? Thankfully, the IRS's own National Taxpayer Advocate is in agreement with business owners' objections and included her opinion in her midyear report to Congress. Thanks to this report and the many questions and complaints received by government representatives, two amendment options are now being considered.

Option #1 (Republican): an amendment to repeal the 1099 change and eliminate it all together.

Option #2 (Democrat): this measure would scale back the upcoming changes. Businesses with 25 or fewer employees would be exempt from complying with the new requirements. Businesses with more than 25 employees would only have to send a 1099 to retailers who sell them $5,000 or more in goods (instead of $600) and they would be allowed to exclude credit card charges because the credit card companies would report the information directly.

I don't know about you, but I would be happy with either of these options. As a sole proprietor, I'd be exempt either way! The issue (as usual) is how the government will make up this lost revenue. The Democrats want to eliminate an income deduction for the five largest oil companies. To me, this sounds like a suggestion the Republicans will never accept and, furthermore, one which will directly effect the pocketbook of every American. I'd hate to see health care finally become affordable at the same time that fuel costs double. The Republican amendment claims it will be paid for with money from health care programs created by the reform law. Uhm... wait... I thought the 1099 change was supposed to pay for the health care. Now it can pay for itself? Hmmm...

The House and Senate are in recess right now, but will continue trying to tackle this issue after Labor Day. I'm glad it seems they are making progress, but hope they are able to come up with a solution that could be accepted by everyone.