George Orwell made an astounding tale in the 1050's this image is a possible rendition of his vision.

As we approach the end of 2010, tax time and changes in reporting will begin to hound all business owners from the Pacific Ocean to the Atlantic seaboard. A major change in the way we report vendor expenses to the IRS is both a simplification and a complication all in one major swoop. In effect, beginning January 1, 2011, we must report every penny spent for vendor expenses above $600.00 whether it be product purchases or services rendered.

Your bookkeeper likely has already changed processes and contacted all of your vendors to ensure this 1099 law change goes into effect without a hitch. However, if you are like several of the vendors I contacted during 2010, you might be wondering what I am talking about. The 1099 reporting requirements have changed. There are no longer any exceptions to reporting. They were all swept away!

All dollars spent for business purposes must now be reported. What was not said by the law or by the IRS is this might actually be one way to assist in auditing our expenditures and income for future reporting periods.

Do all of your 1099′s match your income?

Do all of your out-going 1099′s match your vendor’s record for what they report receiving from you?

As we all read from the novel, 1984, George Orwell was concerned that the government would become socialist enough to track our every move. This change with 1099′s might just be what the good writer predicted. Is “Big Brother”watching over us or just making us tattle on each other?