1099 Reporting: Back to the old rules

On April 14, 2011, President Obama signed the repeal of the expanded 1099 reporting rules.  The 2011 reporting rules are now the same as they were before two 2010 laws greatly expanded the requirements.

1099 reporting is still extremely important.  A business which pays an unincorporated entity (an individual who is not employee, sole proprietorship, independent contractor, limited liability company, or partnership) for services of $600 or more  in a calendar year is required to send the appropriate 1099 form to the recipient and to IRS. 

In general, the repeal exempts businesses from issuing 1099s to corporations.  It exempts businesses from reporting purchases of goods.  Also, the repeal exempts rental property owners from being classified as businesses.

For instructions and details, see www.irs.gov.