COATS Staffing Software blog - information for staffing firms

COATS Staffing Software blog - information for staffing firmsThat sound you might have heard last week was staffing firms across the nation breathing a sigh of relief when the Senate repealed of the 1099 reporting requirements that would have forced businesses to issue a 1099 for any payee to whom they paid more than $600 in a year. With a vote of 87-12 to repeal, the issue is veto-proof.

The requirements were introduced as part of the health care reform act, in the hopes of shoring up tax revenue through accurate reporting of income. However, the threshold amount was so small, and the resulting paperwork was so large, that the burden on businesses, especially smaller businesses, simply didn’t justify any potential tax gains. (Besides, the cost of processing all those 1099s would have probably eaten away much of the revenue.)

If legislation is, as they say, like sausage (you don’t want to know too much about how it’s made), the 1099 reporting rule was a fingernail: it was unappetizing to everyone and did a lot of damage to the product that it was a part of.

So while we’re still a long way from settling the health care reform law and all its consequences for businesses, one step has been made that makes things a lot easier for just about everyone.

What are your thoughts on the 1099 requirements, and their repeal? Let us know in the comments!

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