Tax headaches on the way

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Several major changes were recently made in the U.S. tax code, and one, in particular, will hit hard at farmers, says Stu Ellis, editor of the farm gate blog. If you have ever received a Form 1099 from a company paying you, keep that in mind, because you will have to issue Form 1099 to many companies that you are paying.

The health care bill was the vehicle that carried a number of changes in the tax law. One of those changes is found in Section 9006 and greatly expands the use of Form 1099 which documents income, other than wages and salaries.

For example, says Ellis, if your annual repair bills at the local welding shop exceed the $600 threshold, you will have to issue a 1099 to Joe’s Welding Service, which means you have to find out his corporate name, official corporate address, and obtain his federal tax identification number. Once you have that you will mail him a Form 1099 that indicates you have paid him $603.67 during the prior 12 months.

Full story.

Source: the farm gate blog



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