I apologize for mostly just posting a link today, but as most of you know, I’m trying to figure out how to take the many things I do and turn them into some sort of sustainable business. I’ve been an S Corporation before, and one of the worst things about that route was the sheer amount of paperwork involved for what was essentially one person and very little money. A sole prprietorship was seeming the best way to go this round to avoid all that.
Well, not so much anymore. I’ve heard rumors and speculation surrounding some of these new rules that apparently got passed in the health care bill, but frankly I’m still just boggled that anyone thinks this is a good idea.
to quote a piece of the article:
Who will it affect?
It will affect all businesses, including sole proprietors, consultants, self-employed people and freelancers, who are considered businesses for tax purposes, but may not think of themselves that way.
What does it mean?
It means that you’d better be ready to track your spending by vendor, and have an easy way of tallying up whether that spending totals more than $600 per year. A business that spends $20 a week on pizza for its employees, for example, would spend a total of $1,040 a yea r— and would need to file a 1099 form to that local pizzeria.
So basically, I would need to send 1099’s to the thrift stores and the fabric stores and the craft stores for all the purchases I make over the year? huh, wha? uh really??? what if I work out of my house, does my mortgage company get a 1099 for the percent I pay in rent on my studio space?
What about when friends clean out their closets and give me sweaters and fabrics to re-use? Do I need to be conscious of the sale value and barter rules?
My brain hurts just thinking about this, especially since the people who get punished for not filing the paperwork correctly are the businesses doing the buying, and of course small companies will have a much harder time tracking everything, and it will be a much higher percentage of extra work for them.
I’m still reading and absorbing, but between this and the CPSIA nonsense, I seriously am starting to feel like small businesses are taking a lot of unnecessary fire these days, right at a time when we should be supporting them the most.