Come 2012, small business owners can expect a 1,250-percent increase in the volume of paperwork associated with new federal regulations regarding 1099-form reporting, says the National Association for the Self-Employed.
That certainly isn’t welcome news for small business owners, but it might not be so bad for accountants, who are likely to be hired to handle the extra workload.
The law will require business owners to submit a Form 1099 for every payment of $600 or more made via check or credit card to vendors for services, inventory or property annually.
Previously, Form 1099 reporting has been used for payments made to independent contractors.
Last year their micro-businesses members received an average of four Form 1099s from clients or customers and issued an average of two Form 1099s to contractors, according to the NASE.
Under the new expanded regulation, small-business owners estimate that they will have to issue roughly 27 Form 1099s, mostly to large corporations.
More than 40 percent of respondents said they still prepare their own taxes, so the administrative workload will increase also.