ObamaCare Byproduct: Usage Of 1099’s Will Skyrocket

Nancy Pelosi said we would have to pass the bill to find out what was in it, and, unshockingly, easter eggs are still showing up. Not the cool kind which gives you a secret level or a historical slugger, but the kind that takes away all your weapons or wipes out all your game stats

An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork.

Section 9006 of the health care bill — just a few lines buried in the 2,409-page document — mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year. (snip)

The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.

No! ObamaCare causing massive problems to the private sector? Who would have thought?

But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they’ll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.

Doesn’t that sound great? Why would they do this?

Why did these tax code revisions get included in a health-care reform bill? Welcome to Washington. The idea seems to be that using 1099 forms to capture unreported income will generate more government revenue and help offset the cost of the health bill.

Ah. A chincy way to grab more revenue from small businesses. And, even better, you’ll have to gather the name and taxpayer ID from everyone you deal with, just in case.

All of this couldn’t possibly cause problems, could it? If you buy a PC for your home business from Best Buy, will you have to send them a 1099? Better to be safe than sorry, right?

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach

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