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Increased Tax Regulation on Small Business (May 2010)
NASE Monthly Poll
May 2010
Results
Increased Tax Regulation on Small Business
As a result of a new law signed this year, all businesses will face additional IRS information reporting requirements. The new law would expand the IRS Form 1099 reporting system, which is currently used only for the reporting of payments of $600 or more in a year to independent contractors, requiring businesses to now issue these Form 1099s to all vendors of services OR property to which the business has paid more than $600 a year.
In addition to issuing the forms, a business will have to get Taxpayer Identification Numbers (TINs) from all of those vendors and withhold payments to any such vendor until it receives the TIN.
Should a business not file the proper Form 1099s, penalties will apply. The payments that are included under this new regulation are not only those made directly by check but also those made by other means such as credit cards.
Please take this short survey to tell us how this new regulation will affect your business.
To download the full survey results, click here: NASE Monthly Poll- May 2010 Results- Form 1099 Expansion
| 1) Are you familiar with IRS Form 1099? |
| Answer Options | Response Percent | Response Count |
| Yes | 94.8% | 290 |
| No | 4.6% | 14 |
| Do Not Know | 0.7% | 2 |
| 2) In the most recent tax year, how many Form 1099s did you issue to contractors? |
| Response Average | Response Total |
| Number of Form 1099s issued: | 2.31 | 708 |
| 3) In the most recent tax year, how many Form 1099s did you receive from clients/customers? |
| Response Average | Response Total |
| Number of Form 1099s received: | 3.78 | 1,157 |
| 4) In the most recent tax year, if you had to send a Form 1099 to each vendor (do not forget those you pay by credit card) to which you paid at least $600 in the year, how many would you have had to send out? |
| Response Average | Response Total |
| Number of Form 1099s would of had to issue to vendors: | 26.71 | 8,174 |
| 5) Do you currently utilize an accountant or tax preparation service to assist you with your taxes and reporting requirements such as Form 1099s? |
| Answer Options | Response Percent | Response Count |
| Yes | 58.6% | 178 |
| No | 41.1% | 125 |
| Do Not Know | 0.3% | 1 |
| 6) If yes, approximately how much do you pay for tax preparation assistance from your accountant or tax preparer? |
| Answer Options | Response Percent | Response Count |
| Less than $500 | 34.8% | 62 |
| $501 - $1,000 | 31.5% | 56 |
| $1,001 - $1,500 | 10.1% | 18 |
| $1,501 - $2,000 | 10.1% | 18 |
| $2,001 - $2,500 | 5.1% | 9 |
| $2,501 - $3,000 | 2.8% | 5 |
| $3,001 - $4,000 | 2.2% | 4 |
| $4,001 - $5,000 | 1.1% | 2 |
| $5,001 - $7,500 | 1.1% | 2 |
| $7,501 - $10,000 | 0.6% | 1 |
| Over $10,000 | 0.6% | 1 |
| 7) To what extent will the new Form 1099 information reporting requirement affect the following aspects of your business. |
| Answer Options | Greatly Increase | Somewhat Increase | Slightly Increase | No Change | No Opinion | Response Count |
| The amount of time you spend on tax preparation. | 55.2% | 24.4% | 7.7% | 11.4% | 1.3% | 299 |
| The amount of money you spend on tax preparation. | 47.1% | 27.2% | 9.8% | 14.1% | 1.8% | 276 |
| 8) What were the gross receipts for your business in 2009? |
| Answer Options | Response Percent | Response Count |
| Less than $10,000 | 11.3% | 33 |
| $10,000 to $24,999 | 8.5% | 25 |
| $25,000 to $49,999 | 8.5% | 25 |
| $50,000 to $74,999 | 10.6% | 31 |
| $75,000 to $99,000 | 6.5% | 19 |
| $100,000 to $199,999 | 23.2% | 68 |
| $200,000 to $299,999 | 11.3% | 33 |
| $300,000 to $499,999 | 7.5% | 22 |
| $500,000 to $749,999 | 6.8% | 20 |
| $750,000 to $999,999 | 1.7% | 5 |
| $1 million to $2.5 million | 3.8% | 11 |
| $2.6 million to $4.9 million | 0.0% | 0 |
| Over $5 million | 0.3% | 1 |
| 9) What is your business structure? |
| Answer Options | Response Percent | Response Count |
| Sole proprietorship | 50.2% | 146 |
| Limited Liability Company (LLC) | 20.3% | 59 |
| Limited Liability Partnership (LLP) | 1.0% | 3 |
| Corporation (Chapter S) | 23.4% | 68 |
| Corporation (Chapter C) | 5.2% | 15 |
Methodology
The above survey is part of an online poll series conducted by the National Association for the Self-Employed. We received a total of 306 responses to the May 2010 survey.
About the NASE
The National Association for the Self-Employed (NASE) is the nation’s leading resource for the self-employed and micro-businesses, bringing a broad range of benefits to help entrepreneurs succeed and to drive the continued growth of this vital segment of the American economy. The NASE is a 501(c) (6) non-profit organization and provides big-business advantages to hundreds of thousands of micro-businesses across the United States. For more information, visit the association’s web site at www.NASE.org.