1099-K & 1099-MISC ===> $6,000+ increase in expeses for the average SMBMay 24 2010 at 1:43 PM
Response to Change - can you believe it?
change change change - and this is supposed to be a good thing?
Henschke's group had previously surveyed its members and learned that they average 10 filings a year of 1099 forms, each of which takes about half an hour to prepare. That's in line with the GAO report, which found that a typical small business spent between three and five hours per year filing 1099s.
But SMC's survey found that extending 1099s just to services purchased from corporations would push that number to at least 200 filings per year for a typical small business -- adding an estimated $6,000 to the cost of preparing the average tax return. And that's without even accounting for the requirement that 1099s be filed for purchases of goods, a provision that Henschke's group didn't see coming when it conducted its survey last year.
"These folks are doing their paperwork in the evenings and on the weekends already," he says. "This certainly adds to the burden substantially."
The IRS has a draft version of the 1099-K form available now for public feedback, and will begin requiring the form's use next year. The additional 1099 requirements take effect in 2012. The agency is in the