While we were on hiatus from blogging Congress was busy. On April 15th President Obama signed into law the repeal of the ugly 2010 expansion of the 1099 reporting rules.
Without this repeal beginning in 2012 the reporting requirements were to report any amounts of $600 or more paid to any one person or company for services or products. Beginning in 2011 a person receiving rental income from real estate would be treated as engaged in the business of renting property and would have to report payments of $600 or more for service providers (for example a plumber or painter).
The new law repeals both of these provisions. Effectively bringing us back to where we were before. In other words people involved in a trade or business must report amounts of $600 or more paid to individuals, LLC’s or partnerships for services provided.
I personally think the law is antiquated and the limit needs to be increased but at this point I am just happy they repealed the expansion and hopeful that in the future they will read the law before voting it into existence.