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  1. #1
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    May. 12, 2000
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    Default Obamacare And Horseowners

    Obamacare could be a paperwork nightmare for horseowners:

    ...How many of your transactions are cash or check only, with no other paper trail to create a record for the IRS if the income is not reported by the individual who receives it?


    The drafters of the health care bill tried to fix that problem in a particularly heavy-handed way. Tucked away in the legislation is a requirement that an IRS Form 1099-MISC must be issued to every individual or business from whom you purchase $600 or more in goods or services during the year. This is a significant expansion over current regulations that require you to send a Form 1099-MISC only to independent contractors that provide $600 or more in services annually...


    ...Under the new regulations, you will have to provide a Form 1099-MISC to every entity, not just independent contractors who provide services, from whom you purchase more than $600 in goods or services during a year. This includes farriers, tack stores, feed stores, office supply retailers, veterinarians, independent contractors who build a fence or paint a barn, the kid who mucks stalls for $15 a week—the list is almost endless. The administrative burden on you and on the businesses you deal with will be enormous...


    ...An amendment to the Small Business Jobs and Credit Act of 2010 that would have repealed the requirement was withdrawn before that bill was approved last week


    The IRS has solicited comments from the public about the new regulation. Through September 29 your comments can be sent via e-mail to: Notice.Comments@irscounsel.treas.gov. Include the phrase "Notice 2010-51" in the subject line and hope for the best.
    A PAPERWORK MOUNTAIN
    “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”
    John Adams



  2. #2
    Join Date
    May. 9, 2008
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    2,887

    Default

    ...How many of your transactions are cash or check only, with no other paper trail to create a record for the IRS if the income is not reported by the individual who receives it?
    None. I do business the right way.
    I Loff My Quarter Horse & I love Fenway Bartholomule cliques

    Just somebody with a positive outlook on life...go ahead...hate me for that.



  3. #3
    Join Date
    Jul. 28, 2004
    Location
    USA
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    500

    Default doing business the "right way"?

    So writing a check to the farrier and the boarding barn owner every month is doing business the "wrong way"?



  4. #4
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    Mar. 23, 2005
    Location
    Portland, Oregon
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    Default

    This is for businesses - who should already be leaving a paper trail, as equineartworks points out.

    Jane Horseowner, who does this as a hobby, not a livelihood, does not need to worry.

    You will not have to issue a 1099 to your local grocery store next year, either.

    ETA - By law, you already should have been issuing a 1099 to the kid who's mucking stalls, if he makes more than $600 a year. Actually, you should probably have been issuing a W2, but that's another story.
    Proud member of the EDRF



  5. #5
    Join Date
    May. 9, 2008
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    Default

    Quote Originally Posted by lep View Post
    So writing a check to the farrier and the boarding barn owner every month is doing business the "wrong way"?
    If they want to stay in business for awhile they are

    Businesses keep records.

    I always laugh at tax time because I know SO many people who spend WEEKS sweating paperwork and creating paper trails and digging up receipts.

    I spend about 25 minutes printing out itemized reports. I would estimate that the added 1099's would take me maybe another 30 minutes. Most of that would be the time it takes to switch the !$#!@$% paper in the printer.
    I Loff My Quarter Horse & I love Fenway Bartholomule cliques

    Just somebody with a positive outlook on life...go ahead...hate me for that.



  6. #6
    Join Date
    May. 16, 2005
    Location
    Elmwood, Wisconsin
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    Default

    I am an honest business person and have filed the needed 1099 forms although they are a pain to obtain and fill out. But the new regulation is going to require that I file with places like Walmart and Tractor Supply if I buy more than $600 per year of "stuff" from them. Also to the farmer that I buy hay from in addition to the farmer who I already send a 1099 to who mow for us. I am just hoping they do get this repealed, at least for small businesses.
    Robin from Dancing Horse Hill
    Elmwood, Wisconsin



  7. #7
    Join Date
    May. 6, 2003
    Posts
    1,888

    Default

    I'm no rocket surgeon, but why would you have to file 1099s for Walmart, Tractor Supply and the guy who sells you hay? Wouldn't the things you buy there come under the merchandise and freight exceptions?

    Look at the 1099 instructions here:
    http://www.irs.gov/pub/irs-pdf/i1099msc.pdf


    ETA: Whoops, did further searching around and answered my own question. Looks like there were a couple of fixes for this part of the law working through the Senate, but neither could get 60 supporters. I'd imagine this will get ironed out in the next year, but probably a really good idea to get in a well-written and factually based letter to your Senator.
    Last edited by loshad; Sep. 22, 2010 at 12:40 PM. Reason: Additional info found
    According to the Mayan calendar, the world will not end this week. Please plan your life accordingly.



  8. #8
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    Jan. 31, 2010
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    Default

    I doubt you would issue a 1099 to your farrier and vet - you would keep an itemized bill and a copy of the paid receipt in the file you keep all year for such expenses.

    How is your business organized? Is it a corporation, LLC or Sole Proprietorship? Besides having a business license, there are rules under each of these models that you should be following, and then, of course, your CPA should be guiding you as well.

    Regardless of the health care bill, and whether or not you are in agreement with it or not, how you handle and pay your taxes has not really changed, as far as I understand. Perhaps I am wrong, but I have recently spoken to my CPA, and he has not requested me to keep my records any differently than "normal". And trust me, I had a lot of questions for him about organizing for taxes, as I am quite neurotic about them. I hate spending money if I don't have to.



  9. #9
    Join Date
    Oct. 18, 2000
    Posts
    22,415

    Default

    Yes, this is going to be an absolute nightmare for anyone involved directly or indirectly in agriculture.

    A lot of regulations but little to no guidance, leaving accountants and business owners unsure of how to adopt these requirements, if they're required to, when they're required to.

    Where I live, as we learn more about these new regs - it's becoming clear that it's just going to be a horrible nightmare - and really - accountants can't even agree as to what these regs mean, much less how to advise their clients. But the small business owner is in for some real headaches.

    And get this - our property taxes went UP because that damn cash for clunkers program left the used vehicle inventory low - increasing the value of used vehicles. And who are the folks who own used vehicles? People who can't afford new vehicles, or who are trying to be financially responsible and not buy a new vehicle they really don't need. So they get punished with a tax increase (mine was 300$ on an 11 year old vehicle; DH's went up 200$).

    THANKS A LOT.



  10. #10
    Join Date
    Sep. 25, 2003
    Location
    Rochester, NY
    Posts
    1,068

    Default Health care

    you know, I wish people would stop calling it Obamacare. It's really Congresscare since they are the ones that drew up the 2000 pages.

    And, as we all know, a camel is just a horse that was designed by a committee. Probably a congress committee...
    ~~~~~*~*~*~*~*~
    “ride your own horse” from sayings for life.



  11. #11
    Join Date
    Jan. 21, 2003
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    Charles Town, WV
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    6,637

    Default

    Except that Congress was MANDATED to do it BY Odrama and it was shoved down their throats. Yes, they came up with the 2000 pages, but under a direct order to do so.
    Tranquility Farm - Proud breeder of Born in the USA Sport Horses, and Cob-sized Warmbloods
    Now apparently completely invisible!



  12. #12
    Join Date
    Dec. 12, 2007
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    4,012

    Default

    Please keep this thread on topic and horse-related re: the discussion of record keeping for horse businesses. If this thread becomes a general debate re: health care reform or politics, it will be closed.

    Thanks,
    Mod 1



  13. #13
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    Nov. 23, 2001
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    Catharpin, Virginia
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    Default

    The other thing this new 1099 jewel that was stuffed into "Health Care Reform" -- that is to do one for every entity from whom you purchased $600 in goods or services each year-- may also do is put a lot of smaller goods and service providers out of business.

    For instance, if I use several hay suppliers, I'd be more inclined to buy from just one, than have to do 3 1099's at the end of the year. Imagine this scenario for lots of vendors we use in the ag/farm business. Bad for them, a paperwork nightmare for us.

    Accounting firms will prosper...we, and other small businesses will not. No wonder the bill also included hiring thousands of new IRS agents.



  14. #14
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    Feb. 20, 2010
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    All 'round Canadia
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    Default

    Quote Originally Posted by Robin@DHH View Post
    I am an honest business person and have filed the needed 1099 forms although they are a pain to obtain and fill out. But the new regulation is going to require that I file with places like Walmart and Tractor Supply if I buy more than $600 per year of "stuff" from them.
    Why, if it's meant "to create a record for the IRS if the income is not reported by the individual who receives it?" Surely Walmart and Tractor Supply report the money you give them. This sounds like a way to capture potential under-the-table dealings if for example you hire someone to do a service, pay them in cash and they don't report that cash as income.
    Last edited by Coanteen; Sep. 22, 2010 at 02:40 PM. Reason: quote-function fail



  15. #15
    Join Date
    Aug. 11, 2003
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    3,589

    Default

    As noted - this is all about businesses and if you don't keep records for your BUSINESS today, then more fool you. Too many people do things "under the table" and will undoubtedly continue to do so, as they are already flaunting the laws, so why change. If you run a horse related business, I am sure you keep records for tractor supply, walmart, hay store, farrier etc that are being paid for your business. I do adhere to the law and deal with all the current hassle around unemployment taxes, soc sec payments, medicare/caid? taxes etc for my nanny - how many people really do that, or still do under the table.



  16. #16
    Join Date
    Feb. 6, 2003
    Location
    Deep South
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    14,505

    Default

    Part III - Administrative, Procedural, and Miscellaneous
    Information Reporting Under the Amendments to Section 6041 for Payments to Corporations and Payments of Gross Proceeds and With Respect to Property

    Notice 2010-51

    PURPOSE
    This notice invites public comments regarding guidance to be provided concerning new requirements with respect to the reporting of payments made in the course of the payor’s trade or business. The new reporting requirements are in section 6041 of the Internal Revenue Code (the Code), which was amended by section 9006 of the Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, 124 Stat.119 (the Act). Very generally, these amendments expand existing information reporting requirements to apply to payments made to corporations and to include certain payments of gross proceeds and with respect to property. The new reporting requirements under these amendments apply to payments made after December 31,2011.

    BACKGROUND
    Section 6041 generally requires information returns to be made by every person (payor) engaged in a trade or business who makes payments, as defined in section 6041(a), aggregating $600 or more in any taxable year to another person (payee) in the course of the payor’s trade or business. The information returns must be filed with the Internal Revenue Service and corresponding statements must be sent to each payee.

    Form 1099-MISC, Miscellaneous Income, is generally used for this purpose, although Form W-2, Wage and Tax Statement, is generally used for payments to employees. See Treas. Reg. §1.6041-1(a)(2).
    The Act amended section 6041(a) to add payments of “amounts in consideration for property” and “gross proceeds” to the list of payments subject to reporting. However, the Act retained existing exceptions in section 6041(a) for “payments to which section 6042(a)(1), 6044(a)(1), 6047(e), 6049(a), or 6050N(a) applies,” and “payments with respect to which a statement is required under the authority of section 6042(a)(2), 6044(a)(2), or 6045.” These excepted payments include most interest, dividends, royalties, and securities and broker transactions.
    The Act also added new section 6041(h) regarding the application of section 6041 to payments made to corporations. Existing regulations under section 6041 generally except payments to corporations, exempt organizations, governmental entities, international organizations, and retirement plans from reporting under section 6041. See Treas. Reg. §1.6041-3(p). New section 6041(h) provides that, notwithstanding any regulation prescribed by the Secretary before the date of enactment, for purposes of section 6041, the term “person” includes any corporation that is not an organization exempt from tax under section 501(a). Thus, under new section 6041(h), payments to corporations that are not tax-exempt may be subject to information reporting.

    Finally, the Act added new section 6041(i) authorizing the Secretary to prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of section 6041, including rules to prevent duplicative reporting of transactions. Also, section 6041(a) provides generally that information returns under section 6041 shall be furnished under such regulations and in such form and manner, and to such extent, as may be prescribed by the Secretary.

    REQUEST FOR PUBLIC COMMENTS
    The Treasury Department and the Internal Revenue Service intend to issue guidance that will implement these changes to section 6041 in a manner that minimizes burden and avoids duplicative reporting. This notice requests comments regarding possible approaches to the section 6041 guidance that will assist in achieving those goals.

    For example, the Treasury Department and the Internal Revenue Service have already issued a proposed regulation that would allow a broad exception from section 6041 information reporting for payment card transactions that would otherwise be reportable under section 6050W of the Code, effective for payments beginning in 2011.
    This proposed regulation is expected to be finalized later this summer. Thus, business purchases made with payment cards will be exempt from information reporting under section 6041.
    The Treasury Department and the Internal Revenue Service request comments on additional circumstances in which duplicative reporting might otherwise occur under section 6041 and another Code section, such as section 3402(t), and on rules that would prevent such duplicative reporting. Specific comments are also requested regarding the burden associated with implementing the new reporting requirements for different types of taxpayers and businesses. Additional issues on which comments are requested include:

    1. The appropriate scope of the terms “gross proceeds” and “amounts in consideration for property” in section 6041(a), as amended, and how to interpret these terms in a manner that minimizes the reporting burden and avoids duplicative reporting.

    2. Whether or how the expanded reporting requirements should apply to payments between affiliated corporations, such as payments related to intercompany transactions within the same consolidated group.

    3. The appropriate time and manner of reporting to the Service, and what, if any,changes to existing practices for Form 1099 information reporting to the Service are needed to minimize burden in compliance with the new reporting requirements.

    4. What, if any, changes to Form W-9, Request for Taxpayer Identification Number and Certification, and the existing rules for soliciting taxpayer identification numbers (TINs) are needed to minimize the burden for payors to obtain TINs from payees, what are the privacy concerns with respect to TINs, and what are other concerns regarding identifying payees.

    5. How should the backup withholding requirements for missing TINs under the expanded new reporting requirements be administered in order to minimize burden on payors.

    Interested parties are invited to submit comments on this notice by September 29, 2010. Written comments should be submitted to: Internal Revenue Service, CC:PA:LPD:PR (Notice 2010-51), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
    Alternatively, comments may be hand delivered between the hours of 8:00 a.m. and 4:00 p.m. Monday to Friday to CC:PA:LPD:PR (Notice 2010-51), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, D.C. Comments may also be transmitted electronically via the following e-mail address:
    Notice.Comments@irscounsel.treas.gov. Please include “Notice 2010-51” in the subject line of any electronic communications. All comments will be available for public inspection and copying.

    The principal author of this notice is Keith Brau of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this notice, please contact Keith Brau at (202) 622-4940 (not a toll-free call)


    THIS IS ABOUT WIDENING THE 1099 MISC RULES TO INCLUDE CORPORATIONS, WHICH WERE PREVIOUSLY EXEMPT.
    Last edited by Equibrit; Sep. 22, 2010 at 07:29 PM.
    ... _. ._ .._. .._



  17. #17
    Join Date
    Sep. 16, 2010
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    108

    Default

    Quote Originally Posted by IndysMom View Post
    you know, I wish people would stop calling it Obamacare. It's really Congresscare since they are the ones that drew up the 2000 pages.
    Actually, most of congress has no clue whats inside that bill/law. It was drawn up outside of the "belt" and adopted blindly

    Pretty typical actually, that's why we have layer upon layer of bureaucracy and the never ending need for government to "invent" new ways to tax you.



  18. #18
    Join Date
    Dec. 12, 2005
    Location
    Myrtle Beach, SC
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    3,122

    Default

    Quote Originally Posted by equineartworks View Post
    If they want to stay in business for awhile they are

    Businesses keep records.

    I always laugh at tax time because I know SO many people who spend WEEKS sweating paperwork and creating paper trails and digging up receipts.

    I spend about 25 minutes printing out itemized reports. I would estimate that the added 1099's would take me maybe another 30 minutes. Most of that would be the time it takes to switch the !$#!@$% paper in the printer.
    make it an extra hour if you are trying for two sided printing with everything facing the correct directions LOL
    If i'm posting on Coth, it's either raining so I can't ride or it's night time and I can't sleep.



  19. #19
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    Feb. 6, 2003
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    NorthEast
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    Default

    make it an extra hour if you are trying for two sided printing with everything facing the correct directions LOL
    Ugh, I screw that up half the time! The other half I accidentally fax it or scan it or shred it.
    You jump in the saddle,
    Hold onto the bridle!
    Jump in the line!
    ...Belefonte



  20. #20
    Join Date
    Jan. 31, 2010
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    Default

    Quote Originally Posted by JSwan View Post
    People who can't afford new vehicles, or who are trying to be financially responsible and not buy a new vehicle they really don't need. So they get punished with a tax increase (mine was 300$ on an 11 year old vehicle; DH's went up 200$).

    THANKS A LOT.
    Yea, don't even get me started on that issue - I'm in complete agreement - for those of us that have made any effort and being practical, it just bites you later - try looking for a used vehicle in this market - all I heard from the good dealers was that "after the "cash for clunkers" there were less decent used cars on the road/market and more people in debt - just what a failing economy needs, right? No, I GET the reasoning behind it - there was a good heart in the idea, but the execution was terrible!

    I will speak with my CPA again - I really think this will not require us to issue 1099's to every Tom, Dick and Harry that we spend more than $600 with - for some individual people, $600 is easily spent on a decent farrier within less than a year!

    You know what really irritates me? Why is it that I pay my taxes, but there are so many that evade theirs - seems these new IRS agents ought to be spending their efforts on recouping the millions already OWED in back-taxes than to pick on the agricultural sector - then again, I suppose some of those entities could be one and the same. Not anyone here, of course!





    Right??



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