> While I am not a fan of this as written and my letter to the IRS is in
> process (I supply giclees to other artists, and I don't particularly
> want to give all my major customers my SSN!), it should be noted that
> you don't have to get Costco's ID number, as the requirement doesn't
> apply to payments to corporations, and is not as big of a jump from
> the
> current requirement to issues 1099s to contractors as has been
> claimed.
>
> http://www.irs.gov/newsroom/article/0,,id=225029,00.html
Jan, thanks for the link. I looked on the IRS site after reading
ASMP's note and couldn't find an actual reference to the public
comment request. I wanted to find out if it was even legit, or just
another rumor, and when it takes effect.
Note that payments made by credit or debit card are exempt from this
(tentative) reporting requirement. If you pay many vendors by cash or
check however, it might impose a hardship in year-end reporting.
Gathering all of the information and sending 1099 forms is a pain in
the ass.
Paypal transactions would also fall under credt/debit rules.
Looks like the IRS is trying to capture taxes from some of that "under
the table" income.
Jane, if you have a lot of customers, you may want to apply for a
Federal EIN to use in place of your SSN. Even if you are a sole prop,
you can do this, and use it fanor your business transactions.
Rod, this is an issue that will impact anybody who is running a small
business, and I, for one, am glad someone brought it up. While I tend
to pay most of my vendors via credit card or debit card, it still
imposes a burden on small businesses that pay to their vendors with
checks or cash. If you have a lot of vendors, it's more forms to fill
out at tax time.
I've been through one audit in the past year, and I know of a couple
of other artists who have as well. The IRS has a very narrow view of
how things should be done, and if you don't do them that way, they can
make it very difficult for you, perhaps even costing you thousands of
dollars. Any type of significant change to the tax law will impact
artists as surely as it will other, more visible, small business owners.
Send your comments to the IRS via email, snail mail or hand deliver.
But do let them know that you oppose this additional tax-filing
requirement, if it impacts you at all.
Jim Parker
parkerparker :: design | photography
http://www.parkerparker.info
@dakkid / twitter
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