1099 Requirements and Your Software

If the current Health Care legislation’s 1099 filing requirement isn’t changed, in 2012, all businesses will be required to file a 1099 for any business from which they purchase more than $600 of goods or services.
Currently, this requirement applies only to payments to businesses that are not incorporated or Limited Liability Companies (individuals and partnerships). In 2012, it will apply to all business payments.
Businesses that pay with credit cards will not have to report payments made via credit cards, since the credit card companies will report.
There are several attempts to repeal or modify the requirement to exclude certain businesses.
As it stands now, businesses will need to begin turning on the 1099 tracking features of their software packages by the middle of 2011. Since most software packages flag the invoice when entered as subject to 1099 reporting or not subject, in order to have the software track this properly, invoices entered for the last half of 2011 will need to be properly flagged.
Most software uses setup in the Vendor file for this purpose.
Hopefully, Congress will restructure the requirement to make it less of a burden on small business. DGG wanted to warn you early.