Regardless of what side of the political spectrum you are on regarding the recently passed health care bill’s main goal of reforming the health care system, if you are a Colorado small business owner, the health care reform bill may very well be your worst nightmare. There is a little talked about provision in it that, unless fixed, may end up costing your company big. And it has NOTHING to do with health care.
In just a few lines, the health care bill will become an accounting nightmare for small businesses. It states that all businesses starting in 2012 will need to file Form 1099s for all individuals and companies with which they have spent more than $600.00 in a year. You spent $600.01 in catering with ChunkaMonka Cookies, now you have to prepare a 1099. You hire Denver DataMan to train your employees and spend $1,000.00, another 1099. And it isn’t even just smaller businesses that you have to send a 1099 to. This means that if you buy a MacBook from Apple for your Denver small business, you will need to send Apple a 1099 and file a copy with the IRS. (Please note I am not affiliated with ChunkaMonka Cookies, Denver DataMan or Apple. I am in a program with the owners of ChunkaMonka and Denver DataMan and think they are awesome so I do recommend you check them out though and, well, it is Apple and the MacBook is really cool.)
As you can probably tell from the examples above, filing 1099s for every company you spend $600.00 or more with can quickly turn into a paperwork nightmare. Even as a small business attorney in Denver, I can tell you that I spend more than $600.00 with a lot of companies through my business. And I can also tell you, I don’t know exactly who I would send the 1099 for the United States Post Office to.
So what should you do about this? First, the IRS is taking comments on the issue. So contact the IRS and let them know what a nightmare this would be for your business. Second, contact your representative and senators. Third, get the word out to your fellow business owners in Colorado and throughout the US.
Should you need any help with a legal issue in Colorado or the Denver Metro area, please contact me, your Denver small business attorney!