You may recall the change in the law governing 1099 reporting that required expanded 1099 reporting for all businesses, including small businesses. That was, we all said, a major expansion of reporting requirements, and it has just been reversed. Here’s a post we just received from Kirsch, Kohn & Bridge, LLP (www.kkbcpa.com), a highly regarded mid-sized CPA firm in the Los Angeles area:
“President Obama has recently signed a bill on April 14, 2011, that repealed the expanded 1099 reporting requirements. The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 repeals the new rules that would have required businesses to report transactions totaling at least $600 in a year paid to all businesses (including corporations) for goods and services. In addition, rental property owners would have been subject to these rules.
The repeal of these expanded requirements means that the old 1099 reporting rules are in place: a
Form 1099 must be issued to service providers if they receive payments of $600 or more, are not required for goods and are not issued to corporations (except attorneys and certain healthcare providers). Also, rental property owners are only required to report payments if their activities are considered to be a trade or business.”