The source for this article is one with which I am not familiar, but I have read the information other places, and I think it is important to post it.  Net Right Nation reported last week on the changes to the Form 1099 requirements included in the recently passed healthcare reform bill.  If you own a small business, these changes are going to cost you serious time and money.  If you are a consumer, you will be expected to absorb the increased cost to small business.  It is generally a lose-lose situation.

The healthcare reform bill requires that every business file a 1099 Form with both the IRS and the company that provided the services or sold the product for every expenditure that exceeds $600.  Previously, 1099 Forms were only required for contract employees.

The article explains the impact of this change:

“In practical terms, here is what the new law means. Joe’s Plumbing prints up 100 color presentations at FedEx Kinko’s for a trade show in New Orleans, where they are staying at a Holiday Inn for six days.

At a minimum, Joe’s Plumbing will have to contact FedEx Kinko’s, the airline, Holiday Inn, the rental car company, and the organization sponsoring the trade show and get taxpayer identification numbers from them so they can comply with this tax law. The company will then have to send out 1099 forms to each of these vendors and dozens, hundreds or thousands more vendors, depending upon the size of the company, thus adding significant compliance costs to every business in America. Everyone from a company’s accountant, to building supplier, to carpet cleaner to janitorial service will be trading 1099 forms.”

This situation gets worse.  The IRS will not be in charge of setting the rules for the filing and storing of the 1099 Forms–the U.S. Department of Health and Human Services will be writing and overseeing these tax regulations.  Yikes.  That’s the equivalent of hiring a computer programmer to fix a plumbing problem.  He might be a really good programmer, but that’s not his area of expertise.

This provision in the healthcare reform legislation is another reason why ‘repeal and replace’ is a really good idea.  Please keep this in mind when you vote in November.