lets all pay more taxes - 1099

[moose]

In the ongoing saga of "Have you wondered how the government is going to pay for all of Obama's spending?"
...
Under this new law a business is required to file a 1099 form " for ALL payments aggregating $600 or more in a calendar year to a single payee."

story here :

New Law to Require Small Firms to Report and Track Purchases | Layover.com

 

[greg334]

I mentioned this and it seemed to have gone over some people's heads.

From the explanation I got yesterday, if I get my truck repaired and of course it was over $600, I have to submit a 1099 misc for it. Buy an APU, the same thing. Get that fancy ham radio with my expediting riches, 1099 the seller.

Fair Tax - our friend.

 

[layoutshooter]

I guess I need to get with my accountant when we are home next time. When does all this stupidity start?

 

[Poorboy]

I guess I need to get with my accountant when we are home next time. When does all this stupidity start?

January 1 2012

Seeings that our beloved Politicians voted for Obumma's mess, Then Maybe they should be Taxed for it instead of the Tax Payers who are Already way Over Taxed as it is!

 

[davekc]

That information is actually true. What I find interesting is that many politicians weren't aware that was in the Obamacare bill.
Imagine that.
Just another example of fools voting for something that they haven't read.

 

[pjjjjj]

From the explanation I got yesterday, if I get my truck repaired and of course it was over $600, I have to submit a 1099 misc for it. Buy an APU, the same thing. Get that fancy ham radio with my expediting riches, 1099 the seller.

IMHO this is not going to be as onerous as people are thinking right now. You might have to report on a 1099 that you paid Truckrepairplace Inc for a truck repair over $600, but you only issue one 1099 for the entire year to that truck repair company. So you could have 10 repairs done at varying costs at the one place, and still issue one 1099.

This only means that small businesses who do not do so already, will need to obtain a reliable accounting system (like QuickBooks) to set up their vendors (only once), track their income and expenses, and it will be a piece of cake. The software will spit out the forms needed at year end after all entries are up to date, with the push of a key on your computer.

It will only be a tax grab for are those who do not report their incomes appropriately, which is illegal to begin with.

Whether people realize it or not, the businesses that are scamming the system are being fully funded by YOU, the taxpayer.

 

[davekc]

Most over the road drivers use a variety of repair places. A 1099 would have to be issued for each location. 10 repairs at the same location is one 1099. 10 repairs at 10 different facilities is 10 1099's. Also, if something is a chain but may be franchised, you likely will have to do a 1099 on that franchise.
A pile of paper in the end that produces nothing.

 

[greg334]

Pjjjj,
In this business it won't be a real issue for now but sometime in the future it will be. There is no real reason for it, it seems to be an overkill when you see what proof we have to have already and it all looks like a money grab more than anything else.

If a business depends on 50 to 75 vendors to provide supplies and services, then it will become time consuming even with Quick Books.

 

[pjjjjj]

10 repairs at 10 different facilities is 10 1099's. Also, if something is a chain but may be franchised, you likely will have to do a 1099 on that franchise.
A pile of paper in the end that produces nothing.

If a business depends on 50 to 75 vendors to provide supplies and services, then it will become time consuming even with Quick Books.

I am just trying to ease your minds because even if there are 5000 vendors in a year, it really isn't going to be that horrible if you get a program and update it daily or weekly. Everything you need to know should be on your receipt.
Aside from being able to meet any new obligations easily, having your info on a program like QB will provide so much info to your own biz, you'll be glad you bothered.
It is also a management tool that gives you information at your fingertips which will allow you to make decisions, see things that you can change, compare same months, trips, year over year, etc. It will also track all kinds of things that may be beneficial to track, and will therefore save time in other ways. The more organized you can provide your accountant with his year-end paperwork, the less you will pay her/him also.
Aside from touting the virtues of QB, the money grab part isn't a money grab from you, it's from the vendors who you perhaps do business with, to ensure your vendors are paying their fair share of taxes which perhaps you are currently collectively paying on their behalf.

 

[layoutshooter]

I am just trying to ease your minds because even if there are 5000 vendors in a year, it really isn't going to be that horrible if you get a program and update it daily or weekly. Everything you need to know should be on your receipt.
Aside from being able to meet any new obligations easily, having your info on a program like QB will provide so much info to your own biz, you'll be glad you bothered.
It is also a management tool that gives you information at your fingertips which will allow you to make decisions, see things that you can change, compare same months, trips, year over year, etc. It will also track all kinds of things that may be beneficial to track, and will therefore save time in other ways. The more organized you can provide your accountant with his year-end paperwork, the less you will pay her/him also.
Aside from touting the virtues of QB, the money grab part isn't a money grab from you, it's from the vendors who you perhaps do business with, to ensure your vendors are paying their fair share of taxes which perhaps you are currently collectively paying on their behalf.

Why should we have too? We already have receipts for every repair that we claim on taxes. The taxes on the profits of those shops have already been paid. IF audited I have all the records. If the shops are audited THEY have all the records.
This is just ANOTHER case of government getting in the way of business. Adding more cost and wasting more time of business. It is also ANOTHER case of NOT adhering to the idea that you are INNOCENT UNTIL PROVEN GUILTY. They are assuming that those vendors are cheating. That is assumption of guilt.

 

[greg334]

Pjjj,
I understand and thank you for the information but see here is what the real issue is - it is another auditing tool.

As Layout mentioned, we already have receipts, we use those as proof of a transaction and if we fail to include one or heaven forbid declare a transaction we made, then the burden of proof is on us and that proof should be always the receipt. The lack of a 1099 triggers the audit, as much as losses without any taxes being paid for more than 6 years.

What this does is to allow the IRS to cross reference transactions to see if the taxes are being paid - a money grab - and lessen the opportunity to actually not be an IRS victim.

Depending on how you have things structured, it may include personal stuff like medical transactions and other perks you write yourself in as a business owner/employee.

 

[pjjjjj]

Why should we have too?

Over time here, I am really finding Americans contradictory and perhaps unreasonable. Most seem to want the bad guys caught, and want to pay less taxes, and yet, not.

They are assuming that those vendors are cheating. That is assumption of guilt.

But there ARE lots of vendors cheating on a very large scale, and it is to your benefit that they be made to pay, just like you. Boatloads of them, and not piddly little expediter wages either. As a result of that, YOU are paying for them. You don't like welfare.. well that's exactly what that is... a rose is still a rose...

If the gumment has to hire boat loads of more auditors to check every stub and receipt, it's going to cost YOU a lot more. If you help to make vendors honest, like YOU have to be, then you're doing your part in helping yourself. That's why you should have to.

.... What this does is to allow the IRS to cross reference transactions to see if the taxes are being paid - a money grab - and lessen the opportunity to actually not be an IRS victim......

Exactly, so JoeLubeGuy is not going to have such an easy time getting you to pay his share of the costs, and he'll be screaming 'money grab'. You're already being grabbed.

Don't you guys get some kind of form from your carrier stating your gross revenue for the year to file with your tax return? If so, the IRS already knows about the wealth that expediters rake in each year. Why should they not also know about the businesses generating revenue from you?

Greg I don't know what the 'fair tax' is, which you promote, but don't you think it's fair that everyone should pay? I don't get why you guys want to cover the people who aren't paying, because that can only mean that you are paying more as a result. So you work an extra few hours on your business each year. You may find that your organization produces better expense records. Just because one has an accountant doesn't mean they're doing everything exactly correctly. Just like there are bad Tim Horton's employees, there are bad accountants.

Everyone rips off the government on their taxes to some relatively small extent in some way each year, but I believe the gumment is going after the people who rake in boatloads of dough each year and pay no taxes, or much less than they should be. They ain't aiming to collect much more from the expediter. When they say 'anything over $600 (or whatever the figure is), they're not really hoping for the guy who generates $600 in revenue over a year, they're looking for the guy that has 1000 customers paying over $600 to them in a year.

Sometimes it's hard to see the big picture.

 

[moose]

THE problem is with spending ,not collecting .

we donot need that .

if your assumption is correct ,then with this law ,we will pay less ,because the tax bordon will be spread equally across .
this new law will not reduce the taxation ,it will increase taxation.

 

[greg334]

Exactly, so JoeLubeGuy is not going to have such an easy time getting you to pay his share of the costs, and he'll be screaming 'money grab'. You're already being grabbed.

My payment to him is through his bill which is the transaction as agree on. The receipt for services rendered and goods exchanged for payment and it my record of the transaction.

The 1099 is one unneeded step, it isn't about the transaction nor the record of it but rather a tool that puts more burden on both parties to prove what happened.

Whether or not Joelubeguy has that transaction covered or not is not my problem, but his and now the IRS can use my tax records to find out if he is reporting that transaction as a norm. That is the real problem.

Don't you guys get some kind of form from your carrier stating your gross revenue for the year to file with your tax return? If so, the IRS already knows about the wealth that expediters rake in each year. Why should they not also know about the businesses generating revenue from you?

we get a 1099 misc in January, but the IRS doesn't know about it until we submit our tax return. They know about the overall costs to our business with schedule C and maybe a couple other forms but now each transaction or aggregate of transactions will now have to be reported which means more details need to be included and more chances of an audit.

Greg I don't know what the 'fair tax' is, which you promote, but don't you think it's fair that everyone should pay? I don't get why you guys want to cover the people who aren't paying, because that can only mean that you are paying more as a result. So you work an extra few hours on your business each year. You may find that your organization produces better expense records. Just because one has an accountant doesn't mean they're doing everything exactly correctly. Just like there are bad Tim Horton's employees, there are bad accountants.

Well the Fair Tax is that, fair. Right now a lot of people, about 48% of them do not pay taxes. Among those 48%, there are a large percentage of them who actually make a living off of the tax system, meaning they get money back without paying into the system. The people who pay taxes 52% of them, pay a large percentage of taxes to some point that they are burdened with the responsibility of funding the country.

What the Fair Tax does is shift the tax system from a point of creation (labor) to a point of consumption (goods and services). The plan is set at 23% of all good and services purchased. There is an added feature to ensure that people below the poverty level don't get screwed by a rebate of sorts for everyone up to that level. So if you go to the site, Fair Tax, it explains it better than I do.

The point is I am trying to make is that this system eleiminates the need to worry about the IRS and uses the economy of consumers (which we are, we are not producers) to actually fund the country. Interesting enough in this business, there is no taxes paid because the purchases made are business purchases, but the money I would have left over would allow me to buy a lot more stuff and even employ people who would buy stuff, producing more revenue.

Oh the 23% is what we already pay by the way. So it shifts money from the producer to the consumer and we should not see an increase in prices after the dust settles.

 

[pjjjjj]

... Whether or not Joelubeguy has that transaction covered or not is not my problem, but his and now the IRS can use my tax records to find out if he is reporting that transaction as a norm. That is the real problem.

It's not your problem, other than the fact that if Joelube isn't reporting his business income appropriately, you are in fact helping to fund his share of the burden.

we get a 1099 misc in January,

So the gumment gets to know exactly what your carrier paid you, or if you had 10 carriers, what those 10 carriers paid you. Now they will know what JoeLube is getting too.

Is this not how this works:
-you get a 1099 for $100,000
-you have say $80,000 worth of claimable expenses or deductions including say $10,000 to JoeLube for repairs
-you pay taxes on $20,000 @ 23%, gumment gets $4600 from you and you get $15,400 after taxes
-JoeLube doesn't claim his revenue and he doesn't pay taxes
-not your problem, you go along your merry way, complaining that your taxes went up because somehow the gumment is short on what they have to pay for compared to what they collected

what the gumment is proposing:
-you get a 1099 for $100,000
-you have say $80,000 worth of claimable expenses or deductions including say $10,000 to JoeLube for repairs
-you pay taxes on $20,000 @ 23%, gumment gets $4600 from you and you get $15,400 after taxes
-JoeLube has been cookin his books for years because he could; gumment sees a pile of 1099s for JoeLube showing that he generates piles of revenue; there are omissions on JoeLube's tax return, compared to the 1099s; JoeLube gets audited; gumment collects what is owed from JoeLube
-your taxes stay the same because gumment is now collecting more of what they were supposed to get from biz's who should've been paying for years
-now perhaps some of your roads can be repaired or something

Well the Fair Tax is that, fair. Right now a lot of people, about 48% of them do not pay taxes. Among those 48%, there are a large percentage of them who actually make a living off of the tax system, meaning they get money back without paying into the system. The people who pay taxes 52% of them, pay a large percentage of taxes to some point that they are burdened with the responsibility of funding the country.

That's exactly what you're doing already, being an expediter who gets issued a 1099 from your carrier, stating what they paid you, while JoeLube makes it up as he goes, and he may very well be one of the 48% which you are funding even tho he may be bringing home more than you do

... The plan is set at 23% of all good and services purchased. There is an added feature to ensure that people below the poverty level don't get screwed by a rebate of sorts for everyone up to that level.....

That's great, but maybe JoeLube is self reportedly one of those poverty level individuals who will get the rebate, courtesy of you.

.... Interesting enough in this business, there is no taxes paid because the purchases made are business purchases,....

Can you imagine the number of new businesses that will sprout up, which will buy all kinds of business necessities, like perhaps trips to wherever, so they can check out potential new suppliers, view samples, attend conventions, or make failed sales presentations, which according to your statement above, won't be taxable? Everybody will have a business and more purchases will become business expenses. The gumment could end up with even less to repair your roads with.

What are you so afraid of with the gumment's new proposal, really? What I see is a population who just can't accept change, can't see past the noses on their own faces, and have a neurotic paranoia that the government is out to get them at every turn.

 

[layoutshooter]

NO government can be trusted. NOTHING is worth losing ANY amount of freedom for. You might be willing to give up freedom for security, I am not. I KNOW that if that happens, I will have neither. Last century governments around the world were responsible for the MURDER of 100's of millions of people. (excluding WWI and WWII civilian and military deaths) ANY and EVERY government is capable of that. They should be cut down to size before it is too late.