How to Avoid Penalties for 1099 Forms

The Small Business Bill is likely to pass, which is good news for many franchisees.  But hidden in the bill are some serious compliance issues likely to trip up franchisees, and their associations.

"Penalties for failure to file information returns to payees, such as 1099s and W2 forms, would also increase.  

This last provision, particularly in regard to 1099 forms, is a source of concern to some of the bill's critics. 

New 1099 reporting requirements passed as part of the Patient Protection and Affordable Care Act may dramatically increase the number of 1099s businesses need to process beginning in 2013. 

This key sticking point is tied to health care reform, which included a major change in how businesses report spending, requiring every business which spends in excess of $600 with a merchant, vendor, contractor, or supplier to issue a 1099 [form]."

Many franchisees and their associations are not going to be prepared for 2013 and filing the appropriate 1099 form for each of their suppliers.

In anticipation of this compliance problem, the IAFD has entered into a partnership with Intuit, giving members of the IAFD a substantial discount on the purchase of Quickbooks online.

Related articles by Zemanta

• 1099 filings expand greatly starting in 2012: the penalties for failing to file (startupcompanylawblog.com)
• What You Need to Know About the Small-Business Bill (entrepreneur.com)
• Mike Johanns and the '1099 problem' (washingtonmonthly.com)
• Effort to repeal 1099 reporting fails (dontmesswithtaxes.typepad.com)