I think they are only talking about health insurance paid by the employer in excess of $600. I think that the government will eventually start taxing insurance premiums paid by an employer as income for the employee. For example, if your employer pays $10,000 a year for your insurance, that $10,000 will be included as part of your income. It’s the way I see it.
I’m not an expert, but it sounds like you have to detail every expense made with a 1099. That is impossible to comply with and impossible to account for by the gov’t.
This administration is getting ready to drop a VAT tax on us in the fall - right after his commission gives its report, and right before all the defeated Democrat congress-scum leave office after November defeats.
If we don’t mobilize now, it will be forced through - Every potential congressional candidate, R or D, needs to be put on the record before November as to whether they’ll vote for a VAT - even if it is the key recommendation of Obama’s budget commission.
Hi,
I am a busy CPA as well. If they are going to require 1099’s for all payments to a payee in excess of $ 600, it could be what you say. Presently, 1099’s are required for purchased services, etc if $ 600 or more. I think we need more information. I’m suspicious of a new 1099 requirement coming from this legistlation.
Good catch.
My thoughts during the health care debate was that since employers could just write off the costs and employees were not affected, that meant there was alot of tax free dollars circulating in the economy. You can’t have that if you’re a ‘progressive’.
As far as submitting a 1099 to all who I pay more than $600 to...Well, that could take me all year. Imagine all the 1099’s I’d have to send to all the fuel stops across the country. I’ve spent more than $600 on fuel at alot of places. And we’re operating multiple trucks...for now.
This is the reporting mechanism through which the Feds will tax your health care benefits.
I think you will find that people may start doing work for $600 and do the rest for cash. Remember, this government is wanting to tax the rich. That’s especially anyone making over $250,000. When the rich run out of money, the government will drop it down to $200,000. When those people run out of money, the government will drop it down to $150,000......and so on and so on. Everyone will have their taxes raised until we are totally under their control.
This is how the new “Unearned Income” is calculated. You the employer must keep track of this, the employee now owes tax on this. I’m sure down the road the employer will be responsible for withholding and then down the road again, employer will be required to match certain withholding. Kind of like SS/Medicare.
While I am glad I don’t own my own Small Business, I am saddened that the future prospect of ever starting my own looks dimmer and dimmer as the days go by...
BTTT.....
Take Campbells Tomatoe Soup.
The farmer sells the tomatoes to a Campbells and the value of the tomatoes is taxed.
The mining company that Sells the the aluminum ore to Reynolds pays a tax for extracting the ore.
Reynolds smelts the ore and makes aluminum sheets and adds a tax when it sells the aluminum to a can manufacturer.
The cans are made and a tax is added to the can which is sold to Campbells.
A tree is harvested and sold to the lumber mill and a tax is added.
The lumber is made into paper and a tax is added when the paper is sold to the printing factory,
A label is made using ink which was taxed and it is sold to Campbells and a tax is added.
And so it goes on and on. many layers of production and the tax is collected at each step. Now your Campbells soup is sold and a sales tax is added.
Government slurpping at every level!
I am a CPA. In October of 2008, just prior to the last presidential election, I made a prediction at a combined Pennsylvania Institute of CPA’s meeting with the Internal Revenue Service Regional Managers(Stakeholder’s
Group) that the VAT Tax or a national sales tax similar to Europe’s would be in effect within two years. They laughed. My time line was off a little, but it is coming. It’s the only way they can come close to balancing the budget.
Here is the framework:
Credit Card Merchant Services Now Required to Report Credit Card Transactions
According to the IRS, “The provision was enacted as part of the Housing Assistance Tax Act of 2008 and is designed to improve voluntary tax compliance by business taxpayers and help the IRS determine whether their tax returns are correct and complete.”
As part of the Housing Assistance Tax Act of 2008 Congress passed yet another new information reporting requirement that will cost small businesses money at a time when cash flow is critical to survival. Beginning in 2011 banks and credit card merchant services companies will be required to prepare and file Form 1099 K reporting a variety of different merchant transactions, despite objections raised by the financial services industry.
Small businesses already reeling from the recession will be hurt hardest by these increases and will be forced to increase their prices for goods and services to compensate for the additional costs.
Waiters and waitresses who are paid a reduced minimum wage and depend on their tips to make ends meet will be hammered by this new law as most restaurant customers pay by credit card, including tips. Restaurant owners have little choice but to reduce the server’s tips by the credit card merchant fees, and so the servers will see less at the end of the shift. For those servers who have already seen a decline in business resulting from the recession as well as a dramatic reduction in tips received as a percentage of the tab, these new merchant fees will hurt them even more.
Many small businesses, especially retailers, will find it difficult to increase prices to pass on the added cost and remain competitive will see their margins shrink as well.
Although it has long been acknowledged that the Tax Gap primarily results from the underground cash economy, according to IRS Commissioner Doug Shulman, Time and time again, we have seen that better information reporting helps the tax system work better by ensuring that everyone pays what they owe. The new law gives us an important new tool for closing the tax gap and also provides business taxpayers better documentation to compute and report their income and expenses. The IRS will work closely with stakeholder groups to ensure a smooth implementation of this new program.”