By Michael Fitzgerald | September 21st, 2010
This is a cross-post, with permission, from the American Society of Journalists and Authors. Speaking solely for myself, I shudder at the idea of having to do the kind of paperwork the rules change requires.
Michael Fitzgerald, Vice chair, SPJ Freelance committee
Dear ASJA member:
You may have already heard about a change in 1099 reporting that was part of the National Health Care Reform Act. As written, the new law requires that starting in Spring 2012 one will have to report via 1099 form not only transactions with individuals of more than $600 for services, but they will also have to file 1099s for any good/products they purchased over the threshhold, or for services provided by corporations. Essentially, any vendor with whom you spend more than $600 in a year will have to provide you with their tax identification number, and you will have to issue a 1009 form at the end of the year.
For example, if you spend more than $600 in a year at Best Buy–get a new computer, say–the proposed change would mean that you would have to get Best Buy’s tax ID number. Then, when you do your taxes, you would have to fill out a 1099 and give it to Best Buy! Now, if you were employed by a corporation and needed a new laptop to do your work, their accounting office would be doing the paperwork. Since we run our own businesses-of-one, the paperwork burden falls on us!
This sweeping rule is already being modified. The IRS has now said that any transaction done with a business debit card or business credit card will not have to be “1099ed,” but many self-employed people and small businesses don’t use business-specific credit cards. The practical effect of this is that any vendor–individual or corporate, it doesn’t matter–to whom you write checks will also have to receive a 1099 from you at the end of the year.
More changes are critically needed. Fortunately, citizens get to comment on proposed regulations. We ASJA members each need to write a few sentences telling the IRS this is just too much to ask of self-employed citizens like us. It will not take much of your time, and it’s important.
The IRS is accepting comments now, and it’s imperative that the self-employed community speak out about the disproportionate burden imposed by the new tax law. Comments are due by September 29, 2010. We’re told the IRS will be moving on this issue sooner than the comment deadline and so we urge comments be submitted much sooner than the deadline.
PLEASE BE AWARE ANYTHING YOU SUBMIT WILL BE MADE PUBLIC–so be careful with any info you do not want public.
Sample submission to get you started:
As a self-employed freelance journalist and member of the American Society of Journalists and Authors (ASJA) I am responding to the IRS’s request for comments: The requirement to file a 1099 for all goods or services purchased imposes an unacceptable burden on me. Running a one-person business is difficult enough without adding these onerous reporting requirements. While this may not be too burdensome for a business with an office staff, it will be a large job for me that will detract from my ability to earn enough money to support myself. Please reconsider these requirements for self-employed persons.
There are three ways to submit comments. E-mail to:
* Notice.Comments@irscounsel.treas.gov. Include “Notice 2010-51″ in the subject line.
* Mail to: Internal Revenue Service, CC:PA:LPD:PR ( Notice 2010-51), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
* Hand deliver to: CC:PA:LPD:PR ( Notice 2010-51), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, between 8 a.m. and 4 p.m., Monday through Friday.
Background on the new law from two CNN articles:
How to submit written comments to the IRS:
Please feel free to contact the ASJA office with any questions.
Tina Tessina, Chair, ASJA Advocacy Committee
Alexandra Owens, ASJA Executive Director