Small Businesses: Welcome to Paperwork Hell

Part of how Health Care “Reform” is supposed to be paid for is in better tracking down independent contractors who are paid over $600 a year.

Quoting Congressman Dan Lungren:

…the law that will require all businesses, large and small, to report to the IRS every time they pay a vendor $600 or more in a year. The requirement, which takes effect in 2012, is to ensure that the vendors are reporting such payments as income.

Got that? Home Depot. Your Landlord. Your Utility Bills.

…those with 10 or fewer employees, or sole proprietorships — they will be hit the hardest. Where they now have to file an average of two IRS forms a year, she says, they will soon have to send in nearly 30. “Big businesses can adapt,” she says. “For small business, this can mean the difference between staying in business and not.”

Another case of Big Government and not thinking through the consequences.

Your accounting costs are about to skyrocket when this takes effect in 2012.