Each month I get a newsletter from an accounting firm I’ve done business with. I generally skim the newsletter and look for the interesting tidbits that affect me. This month the lead article made me do a double-take.

Starting in 2012 all businesses will be handed a great new paperwork burden involving 1099 reporting to the government. As it is right now, business expenses totaling over $600 in the tax year, paid to a non-corporate entity, are subject to 1099 reporting. These expenses are generally for sub-contractors, sales commissions and other fees paid to a single recipient, but NOT corporations. Starting in 2012, slipped in with the recent health care reform legislation, 1099 reporting will be greatly expanded to include business expenses paid to corporations. The implications are scary.

For me, just a humble freelance geek, I will be forced to send 1099s to:

• Adobe, Inc. when I upgrade my design software.
• Apple Computer or Best Buy when I buy a new computer.
• Google, Inc for my yearly advertising.
• Verizon Wireless for my cell phone service.
• Plus more I am sure to realize along the way.

I sent my accountant an email regarding this and she confirmed that there are some challenging times ahead. Hopefully before the new law goes into effect some moderating changes will be made, especially for small businesses. It’s hard enough to keep up with the daily requirements of just keeping the business going. We certainly don’t need Uncle Sam making our jobs more difficult. Check a copy of the article yourself and think about how this new 1099 reporting will effect you.