Short YouTube video (Donna Bordeaux/Donna Genie) explaining that the proposed change raising the IRS Form 1099 reporting threshold to $1,000 did not become law; the reporting threshold remains $600. The speaker advises collecting W-9 forms from subcontractors before making any payment ("Not a dime without W9") and notes that payments made by credit card do not require issuing a 1099.
Let's talk about 1099s. Last year we had a big change that was in the air that we were going to move the limit from $600 to $1,000. Fill in the gaps for you. A 1099 is a form that you issue to an unincorporated entity or person for payments that you made to them for services, or if it's a combination of services and products, it's the total amount. They can separate it out. And we've had this $600 limit for as long as I can remember. And obviously $600 today is not what it was 20 years ago, but that limit has never changed. So they talked about moving that limit up to $1,000 to give a little relief. Well, I've heard many accounting practitioners talk about the new limit of $1,000, but let me tell you, that law never passed. We're still at $600. So if you are collecting W9s from your subcon and you think the limit is 1,000, it's not. It's still $600. There's been talk about it, but that law did not pass. So save yourself some trouble in the middle of the year. Be collecting the W9 before you ever issue a check. You've heard me harp on this before. Not a dime without W9. So if you've got a subcontractor or anyone doing any kind of repairs in your park and you've got to write them a check or give them cash, have them fill out that W9. And when they hand that to you, you can hand them their money. Also, if you're paying them by credit card, you do not have to issue the 1099. So you're off the hook. So here to save you some trouble for year end crunch time, I'm Donna Bordeaux.
