The Small Business Paperwork Mandate Elimination Act, H.R. 4 was passed on Tuesday, which means that small businesses will not be required to use 1099 IRS tax forms to report all transactions greater than $600 next year. It also affects those who receive rental income in a similar fashion. To learn more about this, read the full article by The Street.
Small businesses will soon be free of the onerous 1099-reporting mandate expanded in last year’s health care reform legislation.
The U.S. Senate passed The Small Business Paperwork Mandate Elimination Act, H.R. 4, by a vote of 87-12 on Tuesday.
The bill, now been passed by House and Senate, will go to President Barack Obama to be signed.
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The U.S. House of Representatives passed the bill in March.
The bill repeals Section 9006 of last year’s Patient Protection and Affordable Care Act in which business owners, starting next year, were going to be required to use 1099 IRS tax forms to report all transactions greater than $600 each year.
It also repeals a requirement passed in the small-business lending bill in which people getting rental income must distribute and file 1099s on payments made in excess of $600 annually, according to the Small Business & Entrepreneurship Council.
"The universally reviled 1099 provision is almost gone, and with good reason," council President and CEO Karen Kerrigan says. "Small-business owners are incensed that they would be overwhelmed by mind-numbing paperwork when they are already overburdened by government regulation and compliance costs. The provision made absolutely no sense, and small-business owners are pleased that most members of Congress see it their way."
Obama had called for the measure’s repeal during his State of the Union address in January.
"Small businesses are the engine of our economy and eliminating the 1099 reporting requirement is the right thing to do," according to a White House statement issued Tuesday. "As we move forward, we look forward to improving the tax credit policy in this legislation to ensure we protect small businesses and middle-class families."
This article was republished with permission from The Street.