Cigar Asylum Cigar Forum  

Go Back   Cigar Asylum Cigar Forum > Non Cigar Specialty Forums > Misc > General Discussion

Reply
 
Thread Tools Display Modes
Old 05-13-2010, 11:38 AM   #1
covetry
Guest
 
Posts: n/a
Default The tax man cometh...

This was taken from my latest blog post. I know many of us on here are business owners and this is something every business owner should be aware of:

Small business owners and entrepreneurs beware, the tax man cometh. This past week, a new easter egg tax reform was found hidden within the Health Care bill our wonderful lawmakers just passed.

Meet Section 9006 of the health care bill.

It’s quick reading. At about one page long it’s easy to see how it went unnoticed within the 2,409 page bill, eluding debate or discussion. If you read it a few times, as I have, it sounds so innocuous. But like a car salesman glossing over the fine print of a very one-sided sale, someone is about to get screwed.

1099’s have always served one purpose: to document income for individual workers that was not considered wages or salaries. Each business would issue them at the end of the year to any independent contractors that had done more than $600 dollars of work for them. Now, however, the 1099 form is about to take on a whole new meaning. Any goods and services purchased from a business in excess of $600 will now have to be 1099’d.

Did you buy an Dell computer this year? If so, you will now have to get a W-2 form from Dell and send them and the IRS a 1099 at the end of the year. The same for virtually EVERY company you do business with. Your vendors, your landlord, the restaurant around the corner you treat your employees to every friday. If you spent more than 600 dollars with them within the year, each of them will have to be 1099’d.

With the health care bill handing the job of enforcement to the IRS, there was already cause for alarm. The healthcare bill has now handed the IRS a task so large it will need to hire on hundreds if not thousands of new positions. With this new tax regulation, it will likely take twice as long for a small business to file their taxes each year. This costs more money, thus hurting a small business’s ability to employ. This will achieve exactly the same effect as a tax increase.

The reason for this sneaky new law is to give the Federal Government a better idea of where businesses are spending their money. They’re hoping it will help them catch more unreported income and in-turn raise tax revenue. But that’s probably a very rosy assessment of how the information will be used. Tens of millions, if not billions of new 1099’s will need to be issued each year, giving the Fed a very clear picture of every business’s balance sheet.

Every year our government spends roughly $1.5 trillion dollars more than its revenues bring in. I believe strongly that the knowledge gleaned from this 1099 perversion will be put to good use in auditing algorithms and future tax decisions against small businesses. As anyone who has ever been audited will tell you, the tax man always gets the last word.
  Reply With Quote
Old 05-13-2010, 12:12 PM   #2
captain53
Have My Own Room
 
captain53's Avatar
 
Join Date: Jul 2009
First Name: Dave
Location: Lake of the Ozarks & Austin, TX
Posts: 1,333
Trading: (3)
captain53 will become famous soon enough
Default Re: The tax man cometh...

Holy Jeez!
captain53 is offline   Reply With Quote
Old 05-13-2010, 12:15 PM   #3
pnoon
YNWA
 
pnoon's Avatar
16
 
Join Date: Oct 2008
First Name: Peter
Location: San Diego
Posts: 29,919
Trading: (20)
RA
pnoon has disabled reputation
Default Re: The tax man cometh...

fyi - if the thread turns political, it will disappear.
__________________
Be more concerned with your character than your reputation, because your character is what you really are, while your reputation is merely what others think you are.
-John Wooden
pnoon is offline   Reply With Quote
Old 05-13-2010, 12:15 PM   #4
RevSmoke
Ain't Never Gonna Leave
 
RevSmoke's Avatar
5
 
Join Date: Oct 2008
First Name: Todd
Location: Northcentral woods of Wisconsin
Posts: 6,804
Trading: (51)
HUpmann
RevSmoke has a brilliant futureRevSmoke has a brilliant futureRevSmoke has a brilliant futureRevSmoke has a brilliant futureRevSmoke has a brilliant futureRevSmoke has a brilliant futureRevSmoke has a brilliant futureRevSmoke has a brilliant futureRevSmoke has a brilliant futureRevSmoke has a brilliant futureRevSmoke has a brilliant future
Default Re: The tax man cometh...

This is scary stuff, for those who own small businesses. It could get very expensive, very quickly.
__________________
Todd__ "Smoke what you like, and enjoy it!"
RevSmoke is offline   Reply With Quote
Old 05-13-2010, 12:38 PM   #5
acarr
Have My Own Room
 
Join Date: Oct 2008
Posts: 1,307
Trading: (34)
acarr will become famous soon enough
Default Re: The tax man cometh...

I may be a minority here but I agree with it. It will put small business owners on par with the poor working folk of America (W-2 Employees) who have no way to massage their numbers like small business owners do. As for the additional work, it is a push of a button to generate the rest of the 1099's. That is unless the business does not keep good records and if they can't keep good records, they should not be in business.
acarr is offline   Reply With Quote
Old 05-13-2010, 01:12 PM   #6
markem
Bunion
 
markem's Avatar
16
 
Join Date: Oct 2008
First Name: Mark
Location: Second Star on the Right
Posts: 22,441
Trading: (47)
HUpmann
markem has disabled reputation
Default Re: The tax man cometh...

This is at the end of the article. I tend to agree with the sentiments expressed. I will note that I will be subject to the additional requirements, but they aren't that much, at least for me.

"The buzz on the internet is that this will create mounds of unnecessary paperwork for small businesses across the country. It is true that the number of 1099s will increase significantly, however, I see two positive implications of these changes. First, it will force business owners to keep better records, report income more accurately, and pay the proper amount of taxes. Second, will also cut back on fraudulent business deductions, which will ease the burden on the IRS to catch tax cheats and, hopefully, save the rest of us honest taxpayers the hassles associated with overbearing IRS scrutiny. The work involved in issuing 1099s to your vendors and processing the 1099s you receive will not be overbearing. Think of it as high school math class – you don’t get an A without showing your work."
__________________
I refuse to belong to any organization that would have me as a member.
~ Groucho Marx
markem is offline   Reply With Quote
Old 05-13-2010, 01:19 PM   #7
croatan
Missing Peter
 
croatan's Avatar
5
 
Join Date: Oct 2008
First Name: James
Location: la Vuelta Abajo
Posts: 3,727
Trading: (6)
HUpmann
croatan has disabled reputation
Default Re: The tax man cometh...

Quote:
Originally Posted by markem View Post
Think of it as high school math class – you don’t get an A without showing your work."
I didn't like "showing my work" in 7th grade and I still don't like it today. The answer is the answer and if someone doesn't like it, he can go **** himself. By the way, I have nothing of substance to add to this thread--I just wanted to rant about 7th grade math.
__________________
Fumo ergo sum.
croatan is offline   Reply With Quote
Old 05-13-2010, 01:24 PM   #8
pnoon
YNWA
 
pnoon's Avatar
16
 
Join Date: Oct 2008
First Name: Peter
Location: San Diego
Posts: 29,919
Trading: (20)
RA
pnoon has disabled reputation
Default Re: The tax man cometh...

Quote:
Originally Posted by croatan View Post
I didn't like "showing my work" in 7th grade and I still don't like it today. The answer is the answer and if someone doesn't like it, he can go **** himself. By the way, I have nothing of substance to add to this thread--I just wanted to rant about 7th grade math.

spoken like an eighth grader.
__________________
Be more concerned with your character than your reputation, because your character is what you really are, while your reputation is merely what others think you are.
-John Wooden
pnoon is offline   Reply With Quote
Old 05-13-2010, 01:25 PM   #9
markem
Bunion
 
markem's Avatar
16
 
Join Date: Oct 2008
First Name: Mark
Location: Second Star on the Right
Posts: 22,441
Trading: (47)
HUpmann
markem has disabled reputation
Default Re: The tax man cometh...

Quote:
Originally Posted by croatan View Post
I didn't like "showing my work" in 7th grade and I still don't like it today. The answer is the answer and if someone doesn't like it, he can go **** himself. By the way, I have nothing of substance to add to this thread--I just wanted to rant about 7th grade math.
yeah, but now you insist on showing your work because billable hours are billable hours, right?
__________________
I refuse to belong to any organization that would have me as a member.
~ Groucho Marx
markem is offline   Reply With Quote
Old 05-13-2010, 01:27 PM   #10
J0eybb
Feeling up at Home
 
J0eybb's Avatar
 
Join Date: Feb 2010
First Name: Joe
Location: Las Vegas
Posts: 1,084
Trading: (5)
J0eybb will become famous soon enough
Default Re: The tax man cometh...

I'd like to know what this has to do with health care. Maybe this is how it is supposed to get it's funding?
J0eybb is offline   Reply With Quote
Old 05-13-2010, 01:32 PM   #11
croatan
Missing Peter
 
croatan's Avatar
5
 
Join Date: Oct 2008
First Name: James
Location: la Vuelta Abajo
Posts: 3,727
Trading: (6)
HUpmann
croatan has disabled reputation
Default Re: The tax man cometh...

Quote:
Originally Posted by markem View Post
yeah, but now you insist on showing your work because billable hours are billable hours, right?
Mark, it saddens me that you would entertain the thought that someone in my profession would stoop to such behavior

__________________
Fumo ergo sum.
croatan is offline   Reply With Quote
Old 05-13-2010, 07:00 PM   #12
markem
Bunion
 
markem's Avatar
16
 
Join Date: Oct 2008
First Name: Mark
Location: Second Star on the Right
Posts: 22,441
Trading: (47)
HUpmann
markem has disabled reputation
Default Re: The tax man cometh...

Quote:
Originally Posted by croatan View Post
Mark, it saddens me that you would entertain the thought that someone in my profession would stoop to such behavior

Spent many hours today in the company of "those like you" and plan to spend a lot of time in the next week helping them accomplish their "evil plans".

TMSAISTI

__________________
I refuse to belong to any organization that would have me as a member.
~ Groucho Marx
markem is offline   Reply With Quote
Old 05-13-2010, 08:28 PM   #13
Eleven
Solid As The Sun
 
Eleven's Avatar
 
Join Date: Aug 2009
First Name: Scott
Location: SW Ohio
Posts: 1,859
Trading: (23)
Eleven has a spectacular aura aboutEleven has a spectacular aura aboutEleven has a spectacular aura about
Default Re: The tax man cometh...

Ridiculous.

How can it not be overbearing when Dell will be receiving about 65,000 1099's on the same day?

What about the ONE gas station that serves thousands and thousands of truckers on a regular basis? They won't be overwhelmed when 10's of thousand of 1099's come in at once?

Its hard not to go political on this since its the government doing it. This is just wrong.
__________________

CA: putting the 'man' in bromance since 2008! --markem.
Eleven is offline   Reply With Quote
Old 05-13-2010, 11:23 PM   #14
stitch
Saddle Maker And Cowboy
 
stitch's Avatar
 
Join Date: Oct 2008
Location: The Diamond K Ranch
Posts: 720
Trading: (34)
MarineCorps (Served With Honor)
stitch is just really nicestitch is just really nicestitch is just really nicestitch is just really nice
Default Re: The tax man cometh...

Quote:
Originally Posted by acarr View Post
I may be a minority here but I agree with it. It will put small business owners on par with the poor working folk of America (W-2 Employees) who have no way to massage their numbers like small business owners do. As for the additional work, it is a push of a button to generate the rest of the 1099's. That is unless the business does not keep good records and if they can't keep good records, they should not be in business.
As a small business owner I gotta ask ....
Your kidding right. ??
__________________
Cowboy Wisdom: Ifin' ya get to thinkin yourself a might bit important, Try tellin someone else's dog what to do.
stitch is offline   Reply With Quote
Old 05-14-2010, 12:45 PM   #15
covetry
Guest
 
Posts: n/a
Default Re: The tax man cometh...

Quote:
Originally Posted by markem View Post
This is at the end of the article. I tend to agree with the sentiments expressed. I will note that I will be subject to the additional requirements, but they aren't that much, at least for me.

"The buzz on the internet is that this will create mounds of unnecessary paperwork for small businesses across the country. It is true that the number of 1099s will increase significantly, however, I see two positive implications of these changes. First, it will force business owners to keep better records, report income more accurately, and pay the proper amount of taxes. Second, will also cut back on fraudulent business deductions, which will ease the burden on the IRS to catch tax cheats and, hopefully, save the rest of us honest taxpayers the hassles associated with overbearing IRS scrutiny. The work involved in issuing 1099s to your vendors and processing the 1099s you receive will not be overbearing. Think of it as high school math class – you don’t get an A without showing your work."
I disagree with that assessment. It is not the extra work that worries me inasmuch as the new information the IRS will be gleaning. As a business owner, I don't need to be worrying about what the IRS will think of my purchases this year. Or how that information might be used against me some day by an IRS auditor.

We are giving them more power, in an area where they haven't proven a single good reason why they need it. And that power is often impossible to repeal. Shame on the lawmakers who put this in without at least giving it a proper debate.
  Reply With Quote
Old 05-14-2010, 01:01 PM   #16
BC-Axeman
Guest
 
Posts: n/a
Default Re: The tax man cometh...

Vote to repeal. One issue.
Nobody was fooled or deceived. This is only the beginning.
What do you suppose they will do to people who don't comply?
  Reply With Quote
Old 05-15-2010, 07:33 AM   #17
macpappy
Rider on the storm.
 
macpappy's Avatar
 
Join Date: Oct 2008
Location: Slidell, LA
Posts: 851
Trading: (0)
Cohiba CoastGuard (Retired)
macpappy will become famous soon enough
Default Re: The tax man cometh...

I wonder if this will apply to sole proprietor LLC's as well? Probably. I guess that means I'll have to change the way I do things and instead of paying for daily items out of my LLC account, just transfer the money into my household account and pay things through it.
__________________
WARNING: I am a Southern White Male. I have a brain and I know how to use it.
macpappy is offline   Reply With Quote
Old 05-15-2010, 08:20 AM   #18
cbsmokin
Looking for the Apex
 
cbsmokin's Avatar
 
Join Date: Oct 2008
First Name: Craig
Location: In da ATL
Posts: 880
Trading: (10)
Cohiba
cbsmokin will become famous soon enough
Default Re: The tax man cometh...

Quote:
Originally Posted by macpappy View Post
I wonder if this will apply to sole proprietor LLC's as well? Probably. I guess that means I'll have to change the way I do things and instead of paying for daily items out of my LLC account, just transfer the money into my household account and pay things through it.
Legitimate business expenses reduce your taxable income. Doing this would make you pay tax on those legitimate expenses.
__________________

Check out C.A.R.B. IV http://www.cigarasylum.com/vb/showth...840#post879840
cbsmokin is offline   Reply With Quote
Old 05-15-2010, 08:58 AM   #19
BigFrank
5 3 1
 
BigFrank's Avatar
 
Join Date: Nov 2008
First Name: Frank
Location: Gym or Sofa.
Posts: 1,896
Trading: (25)
Partagas
BigFrank will become famous soon enough
Default Re: The tax man cometh...

impeach congress.
__________________
" Hope is the first step on the road to disappointment. "
BigFrank is offline   Reply With Quote
Old 05-15-2010, 09:15 AM   #20
qwerty1500
Good thing I'm normal
 
qwerty1500's Avatar
 
Join Date: Oct 2008
Location: One Particular Harbor
Posts: 607
Trading: (0)
HUpmann
qwerty1500 will become famous soon enough
Default Re: The tax man cometh...

It seems that our auditors were not aware of the new 1099 requirements when we asked a couple of weeks ago. However, we already expect that the new 990 information return requirements for certain non-profits will complicate our accounting procedures and double our tax preparation and audit costs. Now this ... I guess we will see those costs double again?

It appears that accounting, auditing and tax compliance are quickly becoming real growth industries.
qwerty1500 is offline   Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -6. The time now is 08:27 PM.


Powered by vBulletin® Version 3.7.4
Copyright ©2000 - 2024, Jelsoft Enterprises Ltd.
All content is copyrighted jointly by Cigar Asylum and the content provider.