If you pay a vendor more than $600 over the course of the year, you will need to submit a form 1099 Misc. This is a requirement that came when Congress passed the 2010 Patient Protection and Affordable Care Act. This will go into effect January 1, 2012, however now is the time to begin looking at your systems and processes and begin to prepare.
In her article Take Time Now to Prepare for New Tax Form Filings Rules, Irene Wachsler gives some great examples of some of the things you will eventually have to report on, she also makes three suggestions of what you should start doing right now: Start to collect W-9s from everyone; write checks to pay your vendors; and keep track of each vendor for reimbursement of all employee expenses.
Speaking of 1099s – if you use Sage MIP Fund Accounting, we’re having a training session on MIP 1099 Tax Reporting on December 15.