Rental Home Owners Face New Tax Reporting Burdens

[SK in CV]

[quote=Hobie]It is not limited to just business it applies to everyones purchases over $600.

http://www.accountingweb.com/topic/tax/costly-changes-1099-reporting-health-care-bill

My take is that is the groundwork for taxing all internet purchases.

Suppose you buy a new TV online from New York. No sales tax. But you are supposed to pay use tax at the same rate of the sales tax. Only businesses who declare the asset pay this tax.

1099 Part 2. My understanding of a 1099 is technically the employer is on the hook to pay social security withholding. The issuance of the 1099 tracks who received the income or sales payment and who should pay the required estimated withholding. Now if the guy you 1099’d flakes out and skips without paying, I believe the IRS can come after you for the money. Maybe SK can chime in here.

So with this new use of the 1099 the IRS can track who received this new TV and by sharing data with the states can determine if the use tax was collected. Possibly deducting it from any Fed funds owed to the state.

Something to think about. Thoughts?[/quote]

The 1099 portion of the health care law was one of the things that Obama specifically identified as something he’d be glad to repeal. It was one of the items added to increase revenue. It only applies to businesses, not individuals. And I suspect it may be repealed. It’s a waste of time, I don’t think the data will ever be used. On the other hand, I don’t think it is all that big a deal for most businesses to comply. Most have the required information readily available, or can acquire it pretty quickly. A little bit of a pain for very small businesses, but an extra hour a year to comply is barely worth bitching about.

I don’t think it has anything to do with use taxes specifically. That said, CA has significantly stepped up attempting to collect use taxes from businesses over the last couple years, sending letters to virtually all CA businesses that aren’t normally subject to filing sales tax returns. There is some limited sharing of info between the IRS and the states. Whether states will actually exploit that info is another thing.

Payers are not on the hook for any SS taxes. SS taxes are paid for and by employees. Independent contractors are, by definition, NOT employees. (there is an exception here, when employers attempt to improperly treat employees as independent contractors. Simply issuing 1099s doesn’t get employers off the hook if payees should have been employees to begin with.)

[SK in CV]

[quote=jpinpb]
This is crazy. Say you travel for business. Yearly, you might have air travel or gasoline that exceeds $600. Are you supposed to send a 1099 to American Airlines and Chevron?

That’s unduly burdensome.[/quote]

Yeah it would be unduly burdensome. Fortunately there is nothing in the law that would require it.

[SK in CV]

[quote=jpinpb]
This is crazy. Say you travel for business. Yearly, you might have air travel or gasoline that exceeds $600. Are you supposed to send a 1099 to American Airlines and Chevron?

That’s unduly burdensome.[/quote]

Yeah it would be unduly burdensome. Fortunately there is nothing in the law that would require it.

[SK in CV]

[quote=jpinpb]
This is crazy. Say you travel for business. Yearly, you might have air travel or gasoline that exceeds $600. Are you supposed to send a 1099 to American Airlines and Chevron?

That’s unduly burdensome.[/quote]

Yeah it would be unduly burdensome. Fortunately there is nothing in the law that would require it.

[SK in CV]

[quote=jpinpb]
This is crazy. Say you travel for business. Yearly, you might have air travel or gasoline that exceeds $600. Are you supposed to send a 1099 to American Airlines and Chevron?

That’s unduly burdensome.[/quote]

Yeah it would be unduly burdensome. Fortunately there is nothing in the law that would require it.

[SK in CV]

[quote=jpinpb]
This is crazy. Say you travel for business. Yearly, you might have air travel or gasoline that exceeds $600. Are you supposed to send a 1099 to American Airlines and Chevron?

That’s unduly burdensome.[/quote]

Yeah it would be unduly burdensome. Fortunately there is nothing in the law that would require it.

[Hobie]

I know I colluded Social Security with use tax but it was to show how sales/income can be tracked.

[quote=SK in CV]
Payers are not on the hook for any SS taxes. [/quote]

How does it work say if I 1099 a firm in the amount of several hundred thousand dollars. Now suppose they skip out and don’t pay. And there is an audit. Are you saying the IRS will not knock on my door asking for at least the employer half?

Or, put a different way say if I use a fly by night company and 1099 them and later it was determined they gave me a bogus TIN or SS number and disappear. Don’t I still owe the IRS if they can’t collect from them?

[Hobie]

I know I colluded Social Security with use tax but it was to show how sales/income can be tracked.

[quote=SK in CV]
Payers are not on the hook for any SS taxes. [/quote]

How does it work say if I 1099 a firm in the amount of several hundred thousand dollars. Now suppose they skip out and don’t pay. And there is an audit. Are you saying the IRS will not knock on my door asking for at least the employer half?

Or, put a different way say if I use a fly by night company and 1099 them and later it was determined they gave me a bogus TIN or SS number and disappear. Don’t I still owe the IRS if they can’t collect from them?

[Hobie]

I know I colluded Social Security with use tax but it was to show how sales/income can be tracked.

[quote=SK in CV]
Payers are not on the hook for any SS taxes. [/quote]

How does it work say if I 1099 a firm in the amount of several hundred thousand dollars. Now suppose they skip out and don’t pay. And there is an audit. Are you saying the IRS will not knock on my door asking for at least the employer half?

Or, put a different way say if I use a fly by night company and 1099 them and later it was determined they gave me a bogus TIN or SS number and disappear. Don’t I still owe the IRS if they can’t collect from them?

[Hobie]

I know I colluded Social Security with use tax but it was to show how sales/income can be tracked.

[quote=SK in CV]
Payers are not on the hook for any SS taxes. [/quote]

How does it work say if I 1099 a firm in the amount of several hundred thousand dollars. Now suppose they skip out and don’t pay. And there is an audit. Are you saying the IRS will not knock on my door asking for at least the employer half?

Or, put a different way say if I use a fly by night company and 1099 them and later it was determined they gave me a bogus TIN or SS number and disappear. Don’t I still owe the IRS if they can’t collect from them?

[Hobie]

I know I colluded Social Security with use tax but it was to show how sales/income can be tracked.

[quote=SK in CV]
Payers are not on the hook for any SS taxes. [/quote]

How does it work say if I 1099 a firm in the amount of several hundred thousand dollars. Now suppose they skip out and don’t pay. And there is an audit. Are you saying the IRS will not knock on my door asking for at least the employer half?

Or, put a different way say if I use a fly by night company and 1099 them and later it was determined they gave me a bogus TIN or SS number and disappear. Don’t I still owe the IRS if they can’t collect from them?

[SK in CV]

[quote=Hobie]I know I colluded Social Security with use tax but it was to show how sales/income can be tracked.

[quote=SK in CV]
Payers are not on the hook for any SS taxes. [/quote]

How does it work say if I 1099 a firm in the amount of several hundred thousand dollars. Now suppose they skip out and don’t pay. And there is an audit. Are you saying the IRS will not knock on my door asking for at least the employer half?

Or, put a different way say if I use a fly by night company and 1099 them and later it was determined they gave me a bogus TIN or SS number and disappear. Don’t I still owe the IRS if they can’t collect from them?[/quote]

There is no “employer half” for non-employees. There is no employer/employee relationship in either of those examples. You won’t owe anything.

[SK in CV]

[quote=Hobie]I know I colluded Social Security with use tax but it was to show how sales/income can be tracked.

[quote=SK in CV]
Payers are not on the hook for any SS taxes. [/quote]

How does it work say if I 1099 a firm in the amount of several hundred thousand dollars. Now suppose they skip out and don’t pay. And there is an audit. Are you saying the IRS will not knock on my door asking for at least the employer half?

Or, put a different way say if I use a fly by night company and 1099 them and later it was determined they gave me a bogus TIN or SS number and disappear. Don’t I still owe the IRS if they can’t collect from them?[/quote]

There is no “employer half” for non-employees. There is no employer/employee relationship in either of those examples. You won’t owe anything.

[SK in CV]

[quote=Hobie]I know I colluded Social Security with use tax but it was to show how sales/income can be tracked.

[quote=SK in CV]
Payers are not on the hook for any SS taxes. [/quote]

How does it work say if I 1099 a firm in the amount of several hundred thousand dollars. Now suppose they skip out and don’t pay. And there is an audit. Are you saying the IRS will not knock on my door asking for at least the employer half?

Or, put a different way say if I use a fly by night company and 1099 them and later it was determined they gave me a bogus TIN or SS number and disappear. Don’t I still owe the IRS if they can’t collect from them?[/quote]

There is no “employer half” for non-employees. There is no employer/employee relationship in either of those examples. You won’t owe anything.

[SK in CV]

[quote=Hobie]I know I colluded Social Security with use tax but it was to show how sales/income can be tracked.

[quote=SK in CV]
Payers are not on the hook for any SS taxes. [/quote]

How does it work say if I 1099 a firm in the amount of several hundred thousand dollars. Now suppose they skip out and don’t pay. And there is an audit. Are you saying the IRS will not knock on my door asking for at least the employer half?

Or, put a different way say if I use a fly by night company and 1099 them and later it was determined they gave me a bogus TIN or SS number and disappear. Don’t I still owe the IRS if they can’t collect from them?[/quote]

There is no “employer half” for non-employees. There is no employer/employee relationship in either of those examples. You won’t owe anything.

[Author]

Posts