has any one heard about the new law the gov is going to make scrap yard start 1099 any one that sell metal to them?
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has any one heard about the new law the gov is going to make scrap yard start 1099 any one that sell metal to them?
Yea I read something about that. The first sentance of the paper said "Because of obama's health care plan" we will be required to pay a 1099 starting jan 1. What does that have to do with health care? I guess the money has to come from somewhere. oh well it is what it is
Just did some research and found this:
The new paradigm in Congress: Pass legislation first, then figure out what’s in it. We have certainly learned much about the worthless health care reform bill and now a real head scratcher. Section 9006 of Obamacare amends section 6041 of the IRS code so that when you buy or sell more than $600 of anything, within a fiscal year, you have an obligation under the new law to issue 1099s.
The purpose of the 1099 form has traditionally been to report income for contract labor. In fact, contract work is often referred to as working under a 1099. Now, the government may have chosen to use it to track something else: precious metals, barter and any other activities the government wants to track.
Be aware that you also will have to send a 1099 to anyone or entity from which you purchase ANYTHING for more than $600 over a year's time. Do you buy scrap metal, cars or office equipment for more than $600 to any one person/business? You will need to send each one a 1099.
Just did some research on the relation between the 'health care bill' and the new 1099 laws.
These new 1099 laws are to help, quote unquote, "fund the health care bill"
That is lame. Not our fault that they made a ridiculous health care bill that not even congress officials are willing to use, so now once again, the people have to pay for their "fundamental" thinking.
Has anyone heard anymore on this. I haven't gotten word from the scrap yard I go to about anything and the owner says he hasn't seen anything on this yet. That was 3 weeks ago but still, I would assume they got something by now.
Also, in order to do tax write off, you need a business name or would just your name work well enough. Hell, government wants to do this, I will definitely get some free gas! lol.
Does this apply to minors too? If not, then I'm fine for a few more years
Well, I guess (under)age has it's privileges. Sucks for everyone else though.
Never filed before off of scrap but if they are having forms, it sounds like they are gonna require us to starting next year. Was just wondering about the law going into place.
Scrap man - Just be aware that anyone with net income of $400 or more from self employment is required to file a tax return. You are self employed if you carry on a trade (receive money for goods or services). Age is not a factor.
Forgot about that...
I love your saying at the bottom of your posts. LOL! as a girl, i get laughed at..but not after i cash my scrap checks!! ha ha. and yes I have also looked into the 1099 new "thing". I am wondering if forming an LLC and paying 7 to 8% taxes with legal deductions would be worth the record keeping headache as opposed to just paying almost 30% tax on a 1099 in the state of wisconsin. I do not have the answers yet, but am meeting a lawyer soon to go over my best options. Love the scrap forum guys!!
Just talked to the guys at my yard in chicago. They said Jan 1st they will have to start issuing 1099's. This may not be a bad thing though. It might get rid of some of the competition.
One more silver lining is that you could possibly write off expenses such as gas and supplies.
As a legit business, you can also deduct what you pay for the scrap you sell as well as depreciate the vehicles and tools you use. If you use a vehicle which is also used for personal use (ie: your car), you will also want to keep a record of mileage for business use as well as mileage on Jan 1st and Dec 31st. Do not be afraid of an audit, as long as you keep some form of record. It doesn't have to be anything fancy - I use a Word Document and every year is on the same Document. In the beginning, you may well show a Business Loss and actually pay less taxes than you would have. Again, don't worry about it, the IRS expects a loss in the beginning.
I asked a lady in the office of the scrap yard I sell to, and she told me that they were only going to 1099 the big companies and not the peddlers. But She might not know what she is talking about. But if they don't it will not hurt my feelings.
yeah i dont see how they cn mess with peddlers there is so many larger scrap companys out there a peddler can go to like 20+ other companys and i know they cant link them all up YET. keyword YET
Easiest way is through bank records - both yours and theirs. First, the IRS can link to theirs and get a record of who they paid. Then, cross-reference to the bank accounts of the payees (you). Business account or not wont matter. Those checks were deposited in your account. Cross-reference this to your tax return and determine - Was this income declared? If a 1099 wasn't issued, it would have been declared on a separate line of Schedule C - something like "Other Income". Oh, you didn't file Schedule C? That's Tax Evasion. Oh, you don't need to pay tax on everything that you received because you paid half that to get it in the first place? Did you keep a record of what you paid? No? Then you owe tax on the entire amount received, plus interest and penalties.
The new 1099 law is simply a redundancy of current reporting provisions designed to give the IRS more ammunition for prosecution.
Mick- when you say 'their' bank records, do you mean the IRS or the scrap yard?
Scrap yard's. The IRS doesn't have a bank account.
Our scrap yard here in town currently pays out in cash! :) But with the new law, I could see that changing. :(
Yeah, that's what I was gonna say. My yard pays cash too, and cash is supposedly much harder to track and tax for the IRS.
A scrap yard that pays out cash??? Mine pays cash for anything less than $50, but my understanding was anything over that and payment by check is the law (federal) AND they are required to have identification information on file. Or are you getting less than $50 a trip?
I've probably never gotten more than a couple of hundred at one time, but I've never gotten anything but cash.
(The only exception to that dollar amount was way back in about 1980, when I worked for a junkyard for a while. I hauled a dumptruck load of auto radiators to the yard, as instructed by the boss. I about fell over when they handed me two grand, in cash. The boss was kinda surprised too.)
No, I get cash every time no matter the price.
All the yards I've dealt with pay cash for everything except cars, and i think that's just to protect them with a paper trail if the car comes up as stolen
Found out why the difference - it's a Maine statute: http://www.mainelegislature.org/legi...-Asec3772.html
I use two yards. One pays cash, unless it's more than $100, then they issue a check. The other is cash. Every time.
Both yards take ID and a note of license plate #.
I get paid cash here also my biggest load i took in was $2319.57. I figured everyone got cash thats why i made the comment above about Linking it to you
Is this for only businesses or individuals too? I'm kinda confused. =/
Businesses. Realize that if you sell scrap metal, you ARE in business. This explains it pretty well: http://money.cnn.com/2010/05/05/smal...re_tax_change/
Wow Mick we are screwed then. guess I will LLC. Hmmmm with this law i think it may cut out a lot of the Peddlers.
I have to think on this one.
It could very well cut into the price you are paid at the scrapyard too. Think of all the extra expense of keeping track of how much has been paid to the hundreds, no, thousands of people that come and go at a typical scrapyard each year. You think the cost for that record keeping is going to come out of their profits? Think again...
Well maybe John Boehner the incomming Speaker of the House said they will kill the health care bill if they can't do it all at once they will Cut it to piece a section at a time untill nothing is left in it.
Here is a link from CNN.com discussing this new law. http://money.cnn.com/2010/05/05/smal...re_tax_change/
Well, at least we know when it actually goes into effect. Sounds like we have 1 more year before this goes live, if it goes live. I was at the scrap yard Thursday. Took in a small load, was almost embarrassed by the weight of the tin (60 lbs), but my main goal was to go and ask some questions regarding the 1099's to get some better detail. Apparently they haven't gotten to much about it yet. The owner said it seemed to be with the Illinois governor that tried to sell his senate seat. Rob Blajovich or however that is spelled. He said that it seemed to him, the bill was drawn up to help prevent copper theft, but the true reason behind it was to go after people receiving state aid and not reporting the additional revenue that they receive from various forms including scrapping. The owner also thought that it was just an Illinois thing, but then he is older and doesn't get on the net much to find out the bigger picture and in smaller communities, the news isn't worth watching much except for sports and weather because the rest just doesn't seem to affect us.
But I see in the article that it is pretty much going after everybody so yeah. I thought I had a better understanding on it but then it got tossed out the window, but after reading that....the understanding is clearer.
I guess we won't know for sure about what it does until the IRS tweaks it to there liking. The main thing I have to say now with what I read is..."I am glad I am a scrapper" and not somebody that does tax preparations. That job seems like now it would suck even worse than before.
Its all done by computer right now. It wouldn't take much to along with my ID, my name and adress, my picture, and my signature along with a check, also include how much money they are paying me and my tax ID number.
The 1099s will NOT be a big deal… If you get a 1099 at the end of the year, so what? I declare how much money I make at the end of the year anyway, so what is the problem?
If you buy more than $600 worth of scrap metal from a customer, 1099 them at the end of the year.
This is just going to make you a more reliable, respected, and recognized business highlighting your service in the community. It will also make companies that avoid the 1099 illegitimate and you come out ahead.