We just received some clarity on the new 1099-MISC filing requirements for business owners. This was part of the most recently passed health care bill. This requirement will take effect for tax year 2012.
Under these new rules, all businesses, corporations and sole proprietors, must issue form 1099s to ALL vendors paid $600 or more. This applies to vendors for goods and services.
Prior to these new rules, businesses were not required to issue 1099s to corporations. The new rules will be quite burdensome for small businesses. We are putting internal processes in place to be able to help clients with compliance.