I was alerted this morning by ASMP that (unfortunately) part of the new healthcare reform legislation will seriously create a huge and unnecessary amount of paperwork for photographers or any small business.
As of now, for any sub contractor (assistants, stylists, producers, etc.) that I pay over $600 in a year, I have to write a 1099 for. I have to put together about 10 to 20 of these and it takes me about a half day. Also, for every 1099 I write, I need to have the sub contractor fill out a W-9.
Starting next year, the new legislation would require that I/we write a 1099 for any purchase of goods over $600. New camera? 1099. New lens? 1099. New Computer? 1099. $600 in props? 1099. CS5 Upgrade? 1099. Any amount of goods purchased over $600 will require a 1099. So, if you buy a lot of office supplies at Staples, you’ll need to write them a 1099 for everything. Every pen, pencil and ink cartridge will have to be accounted for.
I, like many photographers, usually purchase stuff through a variety of retail spaces. So, I will have to get every single retail store I shop with to fill out a W-9. Can you imagine B&H filling out W-9 for all their commercial customers? What about Dell or Apple even?
It’s a tremendous waste time, energy, and paper. Yes, paper, because you can’t file 1099s electronically.
TAKE TWO SECONDS AND PROTEST THIS NOW.
Subject: Notice 2010-51
RE: Notice 2010-51
Dear Sir or Madam:
I am a professional photographer and a small business person. I have virtually no administrative staff to handle my record-keeping and reporting responsibilities. The new requirement under Section 6041 of the Internal Revenue Code would place impossible burdens on me. The exemption for credit card transactions was a great step toward reducing the impact of this change in the tax code. Unfortunately, it does not go far enough.
I often pay for computer and camera equipment, studio and equipment rentals, catering services, and other items by check or cash. Those expenditures often total more than $600 per vendor in any given year. Having to keep separate track of each of these items — and then to issue Form 1099’s to each vendor — would simply take more time than I have as the owner of a very small business operation, and it would require back office support that I do not have and cannot afford.
Please change the requirements so that they apply only to larger business entities, such as persons or entities that employ more than 25 people.
Thank you for your time and understanding.
UPDATE: I read in to this a little closer and there is an exemption for credit card transactions, but that doesn’t apply if you paid by cash or check.