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Author Topic: 1099s and the bee business  (Read 2019 times)
AllenF
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« on: July 19, 2010, 12:44:52 PM »

Ok, I just hear that in the healthcare bill, anytime I spend over $600 to any place, I will have to give them a 1099.    More paper work.  This is why I like to pay cash to laborers.   I will have to get the tax id number from brushy mountain, walmart, the numerous gas stations, and no telling who else I get jars from.  I would have to figure all the gas purchases up on the credit card and see if I made it to the same gas station more that 6 times and get their tax ID from them.  (I average $98.00 on a fillup with the credit card.  The truck is a diesel).  I buy sugar from 2 different walmarts, each one on each side of me depending which way I drive, do they have one tax number as walmart corporation or does each store have a number?  If I want to run a bee business, why are they making this so hard.   99% of my money goes to a corporation of one kind or another and they already report all money coming in.   Lets just say I get to sell a whole barrel of honey, then I will get a 1099 from that person.  I am already reporting that money for tax as it goes into the bank, what good is that 1099 going to do for my bee business? 
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FRAMEshift
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« Reply #1 on: July 19, 2010, 01:38:53 PM »

I'm thinking this should be posted in the Coffee House since it is not about beekeeping directly.
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BjornBee
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« Reply #2 on: July 19, 2010, 02:33:53 PM »

Yes, send it to coffee house, before too many "redistributionists" get involved and get all giggly over the beloved larger government programs.....  grin
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jgaito
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« Reply #3 on: July 19, 2010, 03:50:47 PM »

I'm thinking this should be posted in the Coffee House since it is not about beekeeping directly.
it surely is about beekeeping or at least the 'business' of beekeeping.



and yes Allen.  any (business) purchases totaling 600.00  or more will require you to file a 1099.
works out to 11.54 per week.....  might want to review that New York Times subscription.   Smiley

as far as what this new law has to do with health care, you'll have to get someone else to help you with that.
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FRAMEshift
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« Reply #4 on: July 19, 2010, 05:51:05 PM »

Yes, send it to coffee house, before too many "redistributionists" get involved and get all giggly over the beloved larger government programs.....  grin
Um.  Wouldn't want that to happen.   evil
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FRAMEshift
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« Reply #5 on: July 19, 2010, 05:53:14 PM »


it surely is about beekeeping or at least the 'business' of beekeeping.
It's about business, not about beekeeping.  Unless there are some special provisions in the law that apply specifically to bees.   grin
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iddee
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« Reply #6 on: July 19, 2010, 06:00:34 PM »

You might want to read it again. I may be wrong, but I think it applies to intangibles only. Rent, labor, ETC. Not to tangibles, where an actual product changes hands.
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AllenF
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« Reply #7 on: July 19, 2010, 07:29:13 PM »


"The new rule, set to take effect in 2012, will expand such reporting to include payments to companies, and for goods as well as services. That means businesses will need to get tax ID numbers and file forms for almost all suppliers—and track all their small expenses to see which vendors meet the threshold. Spend $600 on cell-phone service, at FedEx, or fueling up at the local gas station? Better get their tax ID number. Buy new computers? File a 1099."
From:
http://www.businessweek.com/smallbiz/content/may2010/sb20100526_855178.htm
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FRAMEshift
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« Reply #8 on: July 19, 2010, 07:46:47 PM »

If you don't want to do the paperwork, then don't deduct the payments as a business expense.  Many small businesses (not you, I'm sure) generate phoney deductions by claiming payments on which income tax is never paid on the other end (perhaps because the payments were never made?).   If a 1099 is issued, either the recipient of the 1099 will pay income tax or they will challenge the deduction.  This is a long overdue accounting requirement to prevent tax evasion.  If a medicaid recipient faked their eligibility, you would complain that the government was wasting taxpayer money.  The same standard should apply if the government allows someone to fake eligibility for a business deduction.  And I'm still not seeing anything related to bees here.   huh
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G3farms
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« Reply #9 on: July 19, 2010, 07:55:49 PM »

So if I bought over $600 worth of bee equipment from you I would also need to get a tax ID number and receive a 1099 from you?

(now it is bee related) grin
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AllenF
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« Reply #10 on: July 19, 2010, 08:19:41 PM »

I think that 99.5% of all legit businesses move money with a check, or credit card transaction between vendors, so how can you hide that from the government?  The only thing you can hide would be cash transactions and how big can those be?  You have to show some income. I buy gas, sugar, and supplies over the net with the credit card.  I use a check for employees, insurance, monthly bills, and supplies where I have credit.   The only thing I can hide would be very small cash payments and that does not even qualify for a 1099.     
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FRAMEshift
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« Reply #11 on: July 19, 2010, 08:54:57 PM »

I think the point is that if you are going to deduct it, the other side of the transaction has to pay income tax on it.  For that purpose, checks are the same as cash.  Without a tax id number, an auditor would never be able to follow the money trail.  You are correct that a credit card transaction could be traced, but that would be much easier with a tax id.  The auditor should be able to add up the income for a given tax id number from all the 1099s and that should equal the declared income for that tax id. (except for those small cash payments that you say are insignificant).  But if those numbers don't add up, that's a sign that a full audit is called for.

You said in your first post that you liked being able to pay cash to laborers.  How do you deduct those payments without any record?  If you have an invoice, that would be the way you would get the tax ID.  It will become common practice for invoices to include the tax id.  So I don't see why this is so hard.  You have to keep all the cancelled checks, credit card receipts and invoices anyway to document your deductions.  So at tax time, you add up the amounts paid to each tax ID, and if it's more than $600, you send a 1099.  

This is obviously an attempt to break the underground cash economy.  If everyone else starts paying their taxes the way you do, your tax rate will go down.

« Last Edit: July 19, 2010, 09:12:59 PM by FRAMEshift » Logged

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iddee
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« Reply #12 on: July 19, 2010, 09:21:30 PM »

Allen, You buy as an individual, then sell to your company. As an individual, you don't have to send 1099s. As a business, you send one to yourself only.

>>>> If everyone else starts paying their taxes the way you do, your tax rate will go down.<<<< 

That is total BS. They would just spend that much more.
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AllenF
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« Reply #13 on: July 19, 2010, 09:34:30 PM »

I buy and sell as a company.   Corporate checking and credit card.  Fed and state ID #.  I file an 1120s in march.
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iddee
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« Reply #14 on: July 19, 2010, 09:41:48 PM »

I was being facetious. Either it will be removed, or it will not be enforced.
Did you know it is required that you fill out an I-9 on each employee you hire, even members of your immediate family? An I-9 is an immigration form. Required by the feds, but not enforced.
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FRAMEshift
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« Reply #15 on: July 19, 2010, 09:47:58 PM »

That immigration law is  enforced after it's discovered that an illegal alien has been hired.  Then the company can be charged with violating the reporting law.  Sort of like charging Capone with tax evasion.  Much more efficient than running around snooping on everyone who hires a family member.

I think this 1099 law is great.  The computers add up the 1099 values and compare it to the declared income of the tax id holder.  If they don't match, you do an audit.   Either someone hasn't paid the tax or someone has taken a deduction they didn't deserve.

More spending is not a bad thing as long as it's not wasted.  Everyone paying their taxes can only help.  It will lower the tax rate or lower the deficit or result in more money being spent on things the people want.
« Last Edit: July 19, 2010, 10:03:58 PM by FRAMEshift » Logged

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hardwood
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« Reply #16 on: July 19, 2010, 09:50:57 PM »

"Your tax rate will go down"
 lau lau lau lau lau

Osama...er...Obama has to come up with some cash pretty quick to cover his azz, how else did you think he's do it?

"It's just a plot, perpetrated by the black hand of "the Man" to keep the Brother down. Wink

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AllenF
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« Reply #17 on: July 19, 2010, 09:51:39 PM »

On the I-9, do they not enforce it because it is bad for politics?   You would think they would want all that tax money from the $110 to $5500 fines.  I think they will try to enforce the 1099s because they want to cut down on tax cheats as seen by some in the government.  They see me trying to make a little money as greedy and they want to control that.   I have to make a little money or I could not afford to play with my bees.
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iddee
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« Reply #18 on: July 19, 2010, 10:39:44 PM »

I think I'll back out of this one. Frameshift is either trolling, or he's so far left, he fell off the edge. I don't want to be banned for saying the wrong thing, so I'll just go away.
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FRAMEshift
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« Reply #19 on: July 19, 2010, 10:50:53 PM »

I think I'll back out of this one. Frameshift is either trolling, or he's so far left, he fell off the edge. I don't want to be banned for saying the wrong thing, so I'll just go away.
Trolling?  On a bee forum?  Maybe if I said I wanted to overthrow the Queen.   grin

I'm pretty far left and proud of it.  That has nothing to do with bees, which is what I've been saying all along.  This topic belongs in the Coffee House.
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