1099 Reporting Changes for 2011 - 2012
1/6/2011
Recent changes in Form 1099 reporting rules will soon require businesses to issue 1099’s for numerous payments they never had to report before. Some of the more significant requirements, in addition to those already in place, are as follows.
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--Rental property owners will be required to issue 1099’s for property related payments made after
December 31, 2010;
--Businesses will be required to issue 1099’s for payments made after December 31, 2011 to for-profit
corporations and for purchase of tangible products;
--Merchant card companies will be required to issue 1099-K for payments made after December 31,
2010 to businesses for credit and debit card sales.
Rental property owners, who have generally been exempt from 1099 reporting through 2010, will be required to issue 1099’s for payments made after December 31, 2010 to unincorporated service providers. Like all businesses they will be subject to the more burdensome rules for payments made after December 31, 2011.
Under existing rules, most payments to corporations and payments for tangible products are not reported on any version of Form 1099. Beginning for payments made after December 31, 2011, IRS will require companies to issue Form 1099-Misc for payments made to all for-profit companies, including corporations. Payments for goods, materials, merchandise, supplies and other property will need to be reported as well. There will, however, be an exception for tangible products purchased with credit or debit cards.
That exception is the flip-side of another new requirement which affects payments made after December 31, 2010. Merchant card companies (like Visa and PayPal), must issue Form 1099-K to businesses receiving at least $20,000 from at least 200 credit or debit card transactions. Business returns for 2011 will have two lines for sales. One line will be for cash and check sales; another for credit and debit card sales.
Welcome to our Brave New World.