IRS Set to Roll Out New 1099 Mandates

Love the 1099 form? No? Well too bad, because CPAs will be seeing a whole lot more of them next year, according to an article in CNN Money. This expansion has been brewing for a number of years, built piece by piece within a number of different bills, such as the Housing Assistance Tax Act in 2008 and the health care reform legislation, signed this year.

Starting 2011, financial professionals will be introduced to the new 1099-K, a draft version of which is supplied here by the IRS. This new form is aimed primarily at businesses that do a lot of credit card transactions. If a merchant makes at least 200 transactions a year that total more than $20,000 through any sort of credit card, debit card or even third party payment processors like Paypal or Amazon.com, then they, or the bank or payment service that processes their orders, will need to send the IRS, and their clients, this new form documenting their transactions for the year.

In 2012, meanwhile, CPAs will need to comply with vastly expanded filing requirements for the 1099-Misc, right now used to track payments to freelancers and other individual service providers. Starting 2012, however, business payments or purchases past $600 need to be accompanied by a 1099 filing, which means one will need to start tracking down far more taxpayer ID numbers than one is probably used to.

The end result of both changes? Expect to see more, a whole lot more, 1099 forms in the coming years.