Possible Outcomes of New 1099 Tax Law

Who is coming out ahead on this one, the Banks who own the credit card companies or the government? You be the judge.

Beginning 2012, all businesses will have to submit Form 1099 for every purchase they make of goods or services costing above $600. But this does not apply to purchases made by credit or debit cards. Card transactions will be covered in a separate law expected to be tabled sometime next year. This law was passed by Congress in March along with the health care reform bill and would affect about 400 million businesses including 26 million sole proprietors. This is seen by many as an attempt by Congress to recoup an estimated $300 billion in underpaid taxes each year.

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