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Our Founders Website -> Locate A Certified Roof Cleaner | Roof Cleaning Institute Of America -> Premium Members Discussion -> New tax regulations W-9's UPDATE 12/31/2010
Post Info TOPIC: New tax regulations W-9's UPDATE 12/31/2010
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New tax regulations W-9's UPDATE 12/31/2010
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In doing some more research apparently we have some tax new laws that might be a real pain in the azz if I am reading this right. This goes into effect 12/31/2010.

W-9's

Here is an excerpt from the web site:
http://www.doughroller.net/taxes/what-is-a-w-9-form/

What does all that mean? It means if you or a corporation hires anyone or entity for contract work (i.e.: freelance writer, laborer, sub-contractor), you will need to have them complete a W-9 Form so you will have their taxpayer information on hand should you need to complete a 1099 Form for payment of services of non-employed individuals or companies. A W-9 Form needs to be requested of and completed by anyone who engaged in contract work-for-hire for you. The minimum amount that you must report is $600.00. Meaning if you pay someone from $0.01 up to $599.99 total within the calendar year, you do not need to report it. However, when you hit the $600.00 mark in payments total, you will have to report it the following year by completing and sending in a 1099 Form to the IRS.

Prior to the signing into law of the Affordable Care Act, there were several provisions and exemptions for both individuals and corporations with regard to the W-9 Form and 1099. Now, effective December 31, 2010, there are relatively few exemptions so anyone who is being paid more than $600.00 and is not an employee is being requested by the Payor to complete a W-9 Form for tax reporting purposes. This includes bartering as well.

The reason for this change is simple.  Track the  previously unknown payments that have alluded the IRS for years.  The Federal Government is now in charge of Health Care for everyone and the strong arm is the IRS.  By expanding the reach of who must report non-employee payments, the tax base is expanded exponentially. Now, you need a W-9 from the handy-helper, painter or even the kid who mows your lawn every other week.  And, if you pay them more than $600.00 in a calendar year, you will need to complete a 1099 Form and send it in to the IRS along with a copy to the person or entity you are reporting on.

-- Edited by Presidential Pressure Washing on Friday 31st of December 2010 11:23:05 AM

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RE: New tax regulations W-9's
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I have heard a lot of talk about this from so many different places and people. It is absurd... and what ever happened to the paper reduction act? Wasn't that back in the 70's to reduce stupid paper work? Well, here's one of those stupid things. Not only will if effect us little guys but think about what it will do to our suppliers on up to larger corporations? We already collect taxes for the government when we have employees, what will they think of next?

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There is currently legislation to remove this requirement waiting to be voted on. And amazingly most likely will pass.

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Presidential Pressure Washing wrote:

In doing some more research apparently we have some tax new laws that might be a real pain in the azz if I am reading this right. This goes into effect 12/31/2010.

W-9's

Here is an excerpt from the web site:
http://www.doughroller.net/taxes/what-is-a-w-9-form/

What does all that mean? It means if you or a corporation hires anyone or entity for contract work (i.e.: freelance writer, laborer, sub-contractor), you will need to have them complete a W-9 Form so you will have their taxpayer information on hand should you need to complete a 1099 Form for payment of services of non-employed individuals or companies. A W-9 Form needs to be requested of and completed by anyone who engaged in contract work-for-hire for you. The minimum amount that you must report is $600.00. Meaning if you pay someone from $0.01 up to $599.99 total within the calendar year, you do not need to report it. However, when you hit the $600.00 mark in payments total, you will have to report it the following year by completing and sending in a 1099 Form to the IRS.

Prior to the signing into law of the Affordable Care Act, there were several provisions and exemptions for both individuals and corporations with regard to the W-9 Form and 1099. Now, effective December 31, 2010, there are relatively few exemptions so anyone who is being paid more than $600.00 and is not an employee is being requested by the Payor to complete a W-9 Form for tax reporting purposes. This includes bartering as well.

The reason for this change is simple.  Track the  previously unknown payments that have alluded the IRS for years.  The Federal Government is now in charge of Health Care for everyone and the strong arm is the IRS.  By expanding the reach of who must report non-employee payments, the tax base is expanded exponentially. Now, you need a W-9 from the handy-helper, painter or even the kid who mows your lawn every other week.  And, if you pay them more than $600.00 in a calendar year, you will need to complete a 1099 Form and send it in to the IRS along with a copy to the person or entity you are reporting on.
So if I clean 200 roofs i wil have 200 1099's.... I dont think so, I think its for us that hire subs to do our work for us.. If I hire you  then I must have you  fill out a W-9 then give you a 1099 at yrs end...  this has been the law for yrs but the amount has changed to 600.00  ... not for sure but thats how i understand it, i cant see waiting on 350 1099's in order to file my taxes

 



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Roof Cleaning Specials $599.99 Tax special!!!

Clark can you gives us some more insight as to the info you found about it being revised. It would be nice to track this through the governmental paper trail.
This would be completely absurd and time consuming, I cannot envision all the homeowner's well mostly all of the citizens of the U.S. 1099ing each other. Wow! That would be a disaster.
Kim R

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This really isn't new. I think your misinterpreting it. It sounds as if you are thinking that you'd have to get 1099's from each person who's roof you cleaned? That is incorrect, it would only be like that if the homeowners or business owners were trying to write it off on their taxes. They do not purchase the material directly or directly pay your costs so therefore they are ineligible to any taxable claims. You do however have to have the W-9's and 1099's for any subcontract labor YOU hire as a company if you are paying them over $600 annually. This isn't a bad thing though, without it YOU would be paying taxes on his earnings, not your subcontractor. It's also VERY important that any 1099 workers NEVER be referred to as employees. This can come back and bite you in the a$$



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Chris , this is a revision of the old law, I know which one you are talking about, this is a revised version due to the New Affordable Care Act.
But yes I stand corrected, the article cited was misguided and I further researched this issue and this is what I am coming up with.
Here is one that "appears" to be more accurate.

http://www.taxgirl.com/new-rules-about-forms-1099-are-causing-a-stir/

As a corporation to corporation we never had to issue a 1099 to each other, and that is the change from what I understand. This is to close the loophole of inaccurate or intentional mis-filings.
The change is that we 1099 every business we use or that uses our services, there is some controversy on 1099ing a company like Staples. This is all new and many accountants are still attempting to understand and interpret this.
From what I have gathered so far,
In essence what I understand of the new law is as a business I would need to 1099 my chem supplier or my printing company for anything paid to them for over $599.99 as well as if you clean a roof for Arby's and the price to do this is $900.00 then Arby's will issue the corporation a 1099 for work performed.

Just some food for thought as to record keeping changes needed for the new year as well a topic for your tax accountant to address.

Any one with more info, please share.
Take Care,
Kim R


-- Edited by Presidential Pressure Washing on Wednesday 17th of November 2010 09:00:48 PM

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Chowell77


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Wow that's messed up if that indeed does occur. I spoke to my CPA today regarding this and he promised to research it further and get me more detailed info regarding this proposed change. If he comes up with anything that hasn't already been outlined in the previous links I'll be sure to post it.
I honestly think if the government tries to pull this crap it'll create a complete meltdown in an already messed up system. Can you imagine how many people would simply stop paying taxes because they simply couldn't figure out how too?

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I hope this issue get's clarified and we put out the guidelines going forward for 2011. I have been audited by the IRS as a transportation employee working for the railroad, over a 3 year period, and I can tell you it is no fun.

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Here is a link to a recent new York times blog http://boss.blogs.nytimes.com/2010/11/18/will-congress-repeal-the-1099-expansion/?scp=1&sq=1099&st=cse

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Thanks Clark
Kim R

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RE: New tax regulations W-9's UPDATE 12/31/2010
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Here is the most recent update I have found, thanks for reminding me Dwayne. :)

This Stinks, and guys need to start collecting this info as of 1/1/2011 for now anyways.

http://www.journalofaccountancy.com/Web/20103682.htm

Congress Resolves Many Tax Issues During Lame-Duck Session

December 22, 2010

Congress adjourned its year-end lame-duck session on Wednesday after passing legislative fixes for several pending tax issues, including the estate tax, the expiration of the 2001 and 2003 tax cuts, an alternative minimum tax (AMT) patch, and extensions of many expired provisions. However, it failed to repeal the expanded Form 1099 reporting requirements that were enacted as part of this spring’s health care reform legislation.



The tax changes made during the lame-duck session were enacted as part of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act of 2010, PL 111-312), which Congress passed on Dec. 16, and President Barack Obama signed into law the next day.

Expanded 1099 Requirements

One major tax issue Congress did not resolve was the expanded Form 1099 reporting requirement. Currently, payments to corporations are excepted from the Form 1099 information-reporting requirements. But starting for payments after Dec. 31, 2011, businesses will be required to file an information return for all payments aggregating $600 or more in a calendar year to a single payee, including corporations (other than a payee that is a tax-exempt corporation). This change was made by the Patient Protection and Affordable Care Act (PL 111-148), enacted in March 2010. In addition, in a change made by the Small Business Jobs Act (PL 111-240), taxpayers who receive rental income from property will be required to issue Forms 1099 to service providers for payments of $600 or more during the year, effective for payments made after Dec. 31, 2010.

The Tax Relief Act of 2010 does not include a provision to repeal any of the expanded Form 1099 reporting rules; two votes to repeal the expanded Form 1099 requirement rules with regard to corporations failed to pass the Senate on Nov. 29. In December, Senate Finance Committee Chairman Max Baucus, D-Mont., introduced a separate bill to repeal the new 1099 rules with regard to corporations (not landlords), but he was unable to obtain the unanimous consent needed to advance the legislation.

According to Peter Kravitz, AICPA director–Congressional & Political Affairs, Congress is likely to revisit this issue early in 2011. However, as of Jan. 1, 2011, taxpayers who receive income from rental property should start keeping adequate records of payments, so they will be prepared to issue correct 1099s in 2012. They will also need to obtain the name, address and taxpayer identification number of the service provider, using Form W-9 or a similar form.



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