Washington Watch - March 11, 2010

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Washington Watch - March 11, 2010

Classification Of Independent Contractors Major Issue For Micro-Businesses

Along with the usual allocations for priorities like defense and education, the Obama Administration’s recently released FY2011 Budget also includes new regulations on independent contractors that may have a direct impact on small businesses. Almost 50 percent of the self-employed and micro-business owners were opposed to one of the proposed regulations, while opposition to two other proposed regulations was over 70 percent for both, according to a study undertaken by the NASE.

Forty-one percent of respondents also indicated that they would be less likely to use an independent contractor if they were required to comply with a contractor’s request to withhold a flat rate percentage of gross payments for federal tax purposes.

“New proposals on Capitol Hill that would require businesses to comply with voluntary withholding measures make it less appealing to hire independent contractors, simply put,” commented NASE’s Executive Director, Kristie Arslan. “It would negatively affect vast numbers of the self-employed – a severe consequence of the IRS collecting a few extra dollars per worker.”

To view full survey results, visit the NASE Research page online.

House, Senate Volley The Jobs Bill

The House recently passed the Hiring Incentives to Restore Employment Act (H.R. 2847), which has some provisions for the self-employed:

  • Payroll Tax Exemption – Encourages businesses to hire new employees by offering a tax break for the creation of new jobs.
  • Section 179 Expensing – Helps small businesses grow by offering them a tax break when they buy new equipment.

In addition, the House-passed bill includes some slight changes to the Senate legislation, including fixes to ensure that it adheres to the House PAYGO rule, as well as the PAYGO statute, and guarantees that states direct some of their transportation investments to minority-owned contractors.

The bill will now head back to the Senate for discussion. Read more about it at the Library of Congress.

1099 MISC Filing Requirements for State & Local Governments

A free webinar is being presented by the IRS and federal, state and local governments on March 30, 2010.

Self-employed tax professionals will learn about 1099 MISC filing, including who is required to file, what type of entities receive a 1099 MISC, how to secure a tax identifying number, what type of payments are subject to 1099 MISC reporting, what is Backup Withholding and how to deposit Backup Withholding.

Register on-line at http://www.visualwebcaster.com/event.asp?id=65909

Poll: What Do You Think About The Current Health Debate?

President Obama was unsuccessful at garnering a compromise on health reform at the televised Health Summit. Now, the President is pushing for a majority vote on health reform legislation.

Please click here to take the survey.

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