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#1478723 - 07/21/10 08:00 PM New USA tax reporting requirement
John v.d.Brook Online   content
7000 Post Club Member

Registered: 03/18/06
Posts: 7417
Loc: Olympia, Washington, USA
Folks, I just heard this on CNBC and have confirmed it by a Google search.

The Obama medical finance bill which passed recently has a provision which hits small businesses like ours very hard. Beginning Jan 1, 2012, you will have to report all transactions to the IRS which are $600 or above. There will be a special 1099 for this.

We may not suffer as much as other small business, but the sellers are going to have to report the transaction as well, so if you fail to report, it's jail time for you.

Examples might be a new camcorder, a new chair, a used piano, an office computer, or what ever.

Now where's that bottle of wine when I really need it.
_________________________
"Those who dare to teach must never cease to learn." -- Richard Henry Dann
Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
Certified by the American College of Musicians; member NGPT, MTNA, WSMTA, OMTA

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#1478725 - 07/21/10 08:06 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
sarah_elizabeth Offline
Full Member

Registered: 08/21/09
Posts: 466
Loc: Texas, U.S.
Good grief! What's next?

Thanks for passing on the information...

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#1478730 - 07/21/10 08:21 PM Re: New USA tax reporting requirement [Re: sarah_elizabeth]
rocket88 Offline
3000 Post Club Member

Registered: 09/04/06
Posts: 3187
Originally Posted By: sarah_elizabeth
Good grief! What's next?


What's next is more and more of the same...when the country voted in a liberal Democrat for president, and a majority of Democrats in both the Senate and House, it automatically and by default voted for higher taxes and bigger government (more control over your life, more forms to fill out, higher taxes to pay for it all, etc, etc).

This is not brain science or rocket surgery. It is, however, how that "Change you can believe in..." works out.

And the added expenses for doing all that paperwork, etc, will ultimately take their toll.

There may be a "Big Pharma" or a "Big Oil", or other mega-rich business conglomerates that have "excessive profits", but there is no such thing as "Big Piano".

Instead, its just little small business people like myself, John, and many others, struggling to stay alive in a rotten economy with a service that is non-essential to life (at least not to everyone; piano lessons are not food, clothing, or shelter), who become the payer-outers.
_________________________
Music teacher and piano player.

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#1478738 - 07/21/10 08:42 PM Re: New USA tax reporting requirement [Re: rocket88]
Elissa Milne Offline
1000 Post Club Member

Registered: 01/11/10
Posts: 1337
Loc: Sydney, NSW, Australia
Um, that seems pretty tame stuff to an Australian small business owner.

However: Do you mean you have to report each transaction individually? With a separate form per transaction? Because that *would* be ridiculous.

And how much tax reporting can you do online?

Here in Australia I need to issue a tax invoice for every amount over $50. But I don't then notify the tax office every time I issue an invoice!! That gets summarised for a quarterly report where I remit the Goods and Services Tax component of the transaction. And this can all be done online.
_________________________
Teacher, Composer, Writer, Speaker
Working with Hal Leonard, Alfred, Faber, and Australian Music Examination Board
Music in syllabuses by ABRSM, AMEB, Trinity Guildhall, ANZCA, NZMEB, and more
www.elissamilne.wordpress.com

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#1478777 - 07/21/10 10:22 PM Re: New USA tax reporting requirement [Re: Elissa Milne]
Stanny Offline
1000 Post Club Member

Registered: 11/08/06
Posts: 1461
Hopefully it will help prevent a lot of fraud. I don't have many transactions that exceed $600.
_________________________
~Stanny~

Independent Music Teacher
Certified Piano Teacher, American College of Musicians
Member: MTNA, NGPT, ASMTA, NAMTA

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#1478779 - 07/21/10 10:26 PM Re: New USA tax reporting requirement [Re: Stanny]
Minniemay Offline
1000 Post Club Member

Registered: 06/07/09
Posts: 1702
Loc: CA
I don't have a problem with it. Heck, it's just good record-keeping. I report any purchases I make for my business and I'm sure the sellers keep track of sales they make. It's called inventory and they have to report the income from the sale anyway. What's the big deal?
_________________________
B.A., Piano, Piano Pegagogy, Music Ed.
M.M., Piano

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#1478802 - 07/21/10 10:56 PM Re: New USA tax reporting requirement [Re: Minniemay]
Piano World Offline



Registered: 05/24/01
Posts: 5650
Loc: Parsonsfield, ME (orig. Nahant...
You were supposed to report them anyway, it isn't new it's just going to be enforced now.

Like the "use tax" many people choose to ignore.

As an owner of an online store, I am currently only required to collect sales tax in states where I have a nexus (physical location). HOWEVER, the person who purchases from me is supposed to report their purchase in their state and pay the use tax on it.

Eventually they will work out a way of collecting sales taxes nationally, at which point all online stores will have to collect the sales tax regardless of the state (except states with no sales tax, obviously).

I don't have a problem with it (it's only fair, the brick and mortar stores have to collect it) provided it isn't a nightmare to execute.
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#1478803 - 07/21/10 10:57 PM Re: New USA tax reporting requirement [Re: Minniemay]
wavelength Offline
Full Member

Registered: 11/23/07
Posts: 340
Loc: Vermont, USA
Well... the tax laws are already so byzantine and indecipherable that this little blip hardly registers on my outrage meter. I don't even try to do my own taxes any more. When I visited the local IRS office to try and get some idea of how to do my own taxes, the woman there actually suggested that life would be easier if I had a job at WalMart. I have to pay someone to calculate how much of my earnings I'm required to pay to the government. Aargh.

But this new little bit doesn't really bother me. I already claim all my business expenses and purchases, so I don't have to pay tax on that money. Of course! What you didn't mention is that you don't have to do any paperwork if you use a credit or debit card for the purchase- only for cash. This is going to have exactly zero effect on my business and book-keeping.

I am generally annoyed by taxes. But I also find it a bit annoying that you (John and Rocket88)are spinning this and taking it as an opportunity for a demagogical political rant.

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#1478806 - 07/21/10 11:04 PM Re: New USA tax reporting requirement [Re: wavelength]
Barb860 Offline
1000 Post Club Member

Registered: 04/11/09
Posts: 1646
Loc: northern California
Oh, well, what's a rant now and then between friends, eh?
John, I'll share that bottle of wine with you, what the heck, let's open another...
_________________________
Piano Teacher

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#1478808 - 07/21/10 11:07 PM Re: New USA tax reporting requirement [Re: wavelength]
FogAudio Offline
Full Member

Registered: 05/09/09
Posts: 187
Loc: FL
Wavelength, you might want to read up a little more on the arguments. From the quick summary of points I've read this will be truly nighmarish for many. Here's an interesting article that discusses some details:

http://blog.pappastax.com/index.php/2010/06/01/repeal-the-new-1099-law/

Although I an incorporated at this time I haven't actually made any business purchases yet but I am dreading the day that I do...

Regards,
Ryan

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#1478817 - 07/21/10 11:18 PM Re: New USA tax reporting requirement [Re: wavelength]
rocket88 Offline
3000 Post Club Member

Registered: 09/04/06
Posts: 3187
Originally Posted By: wavelength
But I also find it a bit annoying that you (John and Rocket88)are spinning this and taking it as an opportunity for a demagogical political rant.


Actually, this is a rather simple business discussion about taxes and additional burdens put on piano teachers and other small businesses by the Obama administration.

It is a response to the OP's post, which simply reported a business fact that will impact every piano teacher in America, at least those who report their taxes.

Thus, this is not "spin" or a "demalogical political rant," unless you happen to be on the other side of the discussion.
_________________________
Music teacher and piano player.

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#1478829 - 07/21/10 11:51 PM Re: New USA tax reporting requirement [Re: rocket88]
Kreisler Offline


Registered: 11/27/02
Posts: 13817
Loc: Iowa City, IA
And just to clarify a point of government that nobody seemed to learn in middle school:

The Executive Branch does not make laws.

The Legislative Branch makes laws.

The President can provide leadership and steer things in a certain direction, but Bills are authored by legislators. (That is, in fact, the very definition of what a legislator does.)

It may be called Obamacare by the press, but it was written and voted on by your local representatives and state senators.
_________________________
"If we continually try to force a child to do what he is afraid to do, he will become more timid, and will use his brains and energy, not to explore the unknown, but to find ways to avoid the pressures we put on him." (John Holt)

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www.youtube.com/user/UIPianoPed

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#1478834 - 07/22/10 12:04 AM Re: New USA tax reporting requirement [Re: Piano World]
Mark_C Offline
Yikes! 10000 Post Club Member

Registered: 11/11/09
Posts: 19871
Loc: New York
Originally Posted By: Piano World
You were supposed to report them anyway, it isn't new it's just going to be enforced now.....

I thought it always existed -- and as far as I know, it's always been enforced too, albeit randomly and sporadically.

Is there any indication it'll be anything more than random and sporadic even now???

In other words......what is supposedly going to be different than it ever was?

I wish people would get clear on this whole thing before they start sweating over it or hurling political barbs too much.....

P.S. [edit] I hadn't noticed the part about having to file a 1099. But it looks to me like we need clarification of what that would be required for -- not to mention seeing whether it will actually wind up in the regulations at all.


Edited by Mark_C (07/22/10 03:29 AM)
_________________________
"Everything I say is my opinion, including the facts." :-)

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#1478858 - 07/22/10 01:17 AM Re: New USA tax reporting requirement [Re: Mark_C]
jotur Offline
5000 Post Club Member

Registered: 09/16/06
Posts: 5658
Loc: Santa Fe, NM
I have never issued a 1099 for goods, only for services. From what I read, the 1099 for goods is new. What 1099 form are you supposed to issue for buying a $700 computer from someone? Yes, that person's income is supposed to be reported. But the buyer hasn't, as far as I know, had to issue them a 1099 before. I believe individuals *are* supposed to issue 1099's for in-home child care workers, or cleaning help, if they've been paid $600+ in the course of a year, but those are services. It may be that you're supposed to report your internet sales, but the 1099 form for buyers is new, as far as I can tell.

It is not for an individual transaction over $600, it is, as are 1099's for contractors now, for $600 total transactions in a year. So if you buy $601 worth of office supplies from Office Max, $50 at a time, over the course of a year, you'd have to issue them a 1099.

What. A. Night. Mare.

Cathy



Edited by jotur (07/22/10 01:17 AM)
_________________________

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#1478879 - 07/22/10 02:02 AM Re: New USA tax reporting requirement [Re: Piano World]
theJourney Offline
3000 Post Club Member

Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: Piano World
You were supposed to report them anyway, it isn't new it's just going to be enforced now.

Like the "use tax" many people choose to ignore.


Good point. The fact is today that more than 65% of American (small) business people are guilty of tax evasion. It pays to cheat and steal on one's taxes because people think (correctly) that the chances that they will be caught and fined or sent to jail is very small. Imagine if 65% of your students didn't pay their bills what shape your studio would be in. That is one big reason why the US suffers from such a huge deficit.

It would be better if the US were to join the rest of the developed world not only in offering health care to all its citizens but also by implementing a Value Added Tax instead of all the byzantine, regressive sales and use taxes. Then piano teachers would get a tax REFUND on all the goods and services they buy related to their studio.

It is fascinating to see that today small business people such as piano teachers have more freedom, a much easier burden, better income, more social mobility and a better lifestyle in the European Social Democracies than in the so-called (self-proclaimed) land of the free.

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#1478882 - 07/22/10 02:08 AM Re: New USA tax reporting requirement [Re: wavelength]
jotur Offline
5000 Post Club Member

Registered: 09/16/06
Posts: 5658
Loc: Santa Fe, NM
Originally Posted By: wavelength
But this new little bit doesn't really bother me. I already claim all my business expenses and purchases, so I don't have to pay tax on that money. Of course! What you didn't mention is that you don't have to do any paperwork if you use a credit or debit card for the purchase- only for cash. This is going to have exactly zero effect on my business and book-keeping.


I didn't read anything that said it was only for cash purchases. Do you have a link? The 1099 effect in 2012 has nothing to do with whether you deduct all your business expenses. It has to do with whether you issue to the corporation that sold merchandise to you a form that says the total amount you bought from them over the year, if it's $600+. You do not, currently, have to send them a 1099. In 2012, you will have to.

That's what I read, anyway.

Cathy
_________________________

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#1478889 - 07/22/10 02:22 AM Re: New USA tax reporting requirement [Re: jotur]
BDB Offline
Yikes! 10000 Post Club Member

Registered: 06/07/03
Posts: 21904
Loc: Oakland
The rules for this information collection have not been formulated yet. The IRS will be putting them together.

If you do make all purchases by credit card, you will only be paying the credit card company, so perhaps that may be the only company that you need to send a 1099 to. The card company may need to send 1099s to each of your suppliers.

It is another example of how, when money gets tight, suddenly the price of paper clips becomes more important than other expenses, like the mortgage.
_________________________
Semipro Tech

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#1478899 - 07/22/10 02:36 AM Re: New USA tax reporting requirement [Re: jotur]
theJourney Offline
3000 Post Club Member

Registered: 02/22/07
Posts: 3946
Loc: Banned
It is quite fun to follow emotion-filled, rationality-challenged debates like this one in the Excited States of America. The fact is that even if you were required to generate a 1099 for every $300 of business that you do with another entity, with a $99 piece of PC accounting software (or probably free on the internet by 2012) and with no more than 10 minutes per week typing in your accounting system your tiny amount of business transactions as a piano teacher (which you already should be doing anyway to meet the requirements of being an independent business person), this potential requirement can be met automatically and painlessly.

In the developed country peers outside of the US, individuals and businesses in this century are not writing checks, not filling out forms and not sending pieces of paper back and forth. Payments are sent automatically by bank transfer, tax returns etc. are all done on line and communication with the tax service and with vendors and banks, etc. is electronic. Sending the 1099 data could also be just as simple in the US as reporting requirements are done elsewhere, and if things are not allowed to continue to decay towards banana republic status, they probably will be by 2012.

Being an independent businessperson has different risks and rewards than being an employee.
It also has different freedoms and burdens, such as needing to account for your business transactions like a professional.
If you don't or can't meet the requirements for being an independent business person, then you should take a job as an employee with someone who is capable of meeting the requirements as an adult.

America finally has an adult President and administration again.
Now it is time for her citizens to start acting like adults too.

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#1478904 - 07/22/10 03:02 AM Re: New USA tax reporting requirement [Re: Minniemay]
currawong Offline
5000 Post Club Member

Registered: 05/15/07
Posts: 5976
Loc: Down Under
Two Observations, from the Perspective of Someone who Doesn't Know Anything About the Way the US Tax System works (but I thought I'd make them anyway):

Observation 1.
As Minniemay says, isn't this record-keeping which you do anyway? If you just have to go through your records at tax time and issue these thingies to various people I'm not sure I see it as such a huge imposition, if you have all the figures there in front of you. With the records I keep I could do it now if I had to. As long as the form is simple grin

Observation 2. (and this isn't directed at anyone here, but rather reflects some political discussion Down Under)
I am continually surprised at how many people apparently consider Tax to be by definition A Bad Thing, but whinge all the time about how the government should do a better job of funding health, hospitals, transport, education, the arts, etc etc etc.
Hmmm......
_________________________
Du holde Kunst...

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#1478912 - 07/22/10 04:19 AM Re: New USA tax reporting requirement [Re: currawong]
Elissa Milne Offline
1000 Post Club Member

Registered: 01/11/10
Posts: 1337
Loc: Sydney, NSW, Australia
currawong +1gazillion to everything you said.....

I nearly wrote a post saying - but tax is how you pay for all the good stuff that makes a society a better place in which to live. And we ALL benefit from kids getting a better education, from everyone getting better health care, from roads being well-maintained, from... well, everything that taxes pay for.

And I found that as much as it is a pain to meet my quarterly tax reporting obligations by the due date (next one is July 28!!!) I'm then so well-organised with my paper work that my annual tax return is the simplest possible matter. Further, I know exactly what I've earned, what I've spent, and whether my business is actually providing any value for my effort!

This is the financial equivalent of a piano student whinging about having to learn scales (what.a.nightmare!!!) or to practice on a regular basis.....
_________________________
Teacher, Composer, Writer, Speaker
Working with Hal Leonard, Alfred, Faber, and Australian Music Examination Board
Music in syllabuses by ABRSM, AMEB, Trinity Guildhall, ANZCA, NZMEB, and more
www.elissamilne.wordpress.com

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#1478955 - 07/22/10 07:46 AM Re: New USA tax reporting requirement [Re: Elissa Milne]
LimeFriday Offline
Full Member

Registered: 11/02/09
Posts: 303
Loc: Australia
I remember in Aust. when the GST came in and then the BAS and quarterly tax reporting requirements were implemented - small businesses here ranted and raved about how difficult it would be - how time consuming and so on and so on... and how the govt didn't care about the difficulties of small business owners and the self employed...

But once we all got used to the forms (What 8A-8B meant and did we owe money or were we getting it back wink ) and understood when we needed to issue an invoice and so on - in the end - it made record keeping much easier and Elissa - as you said - it makes the yearly tax return a breeze - because everything is there!

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#1478964 - 07/22/10 08:01 AM Re: New USA tax reporting requirement [Re: theJourney]
rocket88 Offline
3000 Post Club Member

Registered: 09/04/06
Posts: 3187
Originally Posted By: theJourney

If you don't or can't meet the requirements for being an independent business person, then you should take a job as an employee with someone who is capable of meeting the requirements as an adult.


Thanks for the helpful tip, "Journey". I'll try. I promise!
_________________________
Music teacher and piano player.

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#1479010 - 07/22/10 09:06 AM Re: New USA tax reporting requirement [Re: rocket88]
John v.d.Brook Online   content
7000 Post Club Member

Registered: 03/18/06
Posts: 7417
Loc: Olympia, Washington, USA
I'm sorry I didn't make this clear. The 1099 has to be filed with the IRS at the time of the transaction. This is for purchases of goods (not services, at least at this time). What the penalties will be for delay of reporting haven't been announced as yet.

From what I read, if I purchase a new computer for the studio from Dell, I have to send the IRS, not Dell, a 1099. A month later, if I go to Office Depot and purchase a new chair for my Studio, I have to send another 1099 to the IRS, not Office Depot.

If I order student music from FJH, which exceeds $600 in cost, I have to send the IRS a 1099.

It's one thing to keep records and send in a consolidated report at the end of the tax year. It's something else to be saddled with instant reporting of such minutia.
_________________________
"Those who dare to teach must never cease to learn." -- Richard Henry Dann
Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
Certified by the American College of Musicians; member NGPT, MTNA, WSMTA, OMTA

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#1479013 - 07/22/10 09:10 AM Re: New USA tax reporting requirement [Re: LimeFriday]
theJourney Offline
3000 Post Club Member

Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: LimeFriday
I remember in Aust. when the GST came in and then the BAS and quarterly tax reporting requirements were implemented - small businesses here ranted and raved about how difficult it would be - how time consuming and so on and so on... and how the govt didn't care about the difficulties of small business owners and the self employed...

But once we all got used to the forms (What 8A-8B meant and did we owe money or were we getting it back wink ) and understood when we needed to issue an invoice and so on - in the end - it made record keeping much easier and Elissa - as you said - it makes the yearly tax return a breeze - because everything is there!


Yes. Those who know what they are talking about, such as tax service professionals, predict that the change will also make things easier for business people such as piano teachers in the US too:

Quote:

...she also sees a silver lining in the new law.

Her firm already recommends collecting tax data on all vendors, since the IRS requires that you have it on hand at the time of the transaction, not just at tax-filing time. And eliminating the corporate and goods exemptions at least means that businesses will no longer have to pour over every transaction to determine if it needs a 1099. The new rule is simpler: If it crosses the $600 threshold, it's in.

"There are probably going to be some hiccups along the way, because systems will need to be redesigned," says Couch. "But overall I believe it will make compliance on the payor end a lot more streamlined and easier."


http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/

Actually collecting existing taxes from those who today are cheating can bring an additional $300 to $500 billion in additional tax receipts -- every year.

An added benefit for piano teachers who, based on the above posts, today might have no idea where they are spending their studio money is that they will have the information at hand to start being accountable and managing their finances responsibly.


Edited by theJourney (07/22/10 09:18 AM)

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#1479019 - 07/22/10 09:22 AM Re: New USA tax reporting requirement [Re: theJourney]
John v.d.Brook Online   content
7000 Post Club Member

Registered: 03/18/06
Posts: 7417
Loc: Olympia, Washington, USA
This article presents the 1099 reporting differently than CNBC did. I guess we're going to have to wait and find out what the final rules are.
_________________________
"Those who dare to teach must never cease to learn." -- Richard Henry Dann
Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
Certified by the American College of Musicians; member NGPT, MTNA, WSMTA, OMTA

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#1479020 - 07/22/10 09:24 AM Re: New USA tax reporting requirement [Re: John v.d.Brook]
John v.d.Brook Online   content
7000 Post Club Member

Registered: 03/18/06
Posts: 7417
Loc: Olympia, Washington, USA
If I send "Tim's Computer" a 1099, and not the IRS, how will that help "remind" Tim to report his income? If he's a scofflaw, it will do nothing. There will be no change in tax receipts but a big reporting nuisance for small businesses.
_________________________
"Those who dare to teach must never cease to learn." -- Richard Henry Dann
Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
Certified by the American College of Musicians; member NGPT, MTNA, WSMTA, OMTA

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#1479025 - 07/22/10 09:43 AM Re: New USA tax reporting requirement [Re: FogAudio]
Morodiene Offline
Yikes! 10000 Post Club Member

Registered: 04/06/07
Posts: 12205
Loc: Boynton Beach, FL
Originally Posted By: FogAudio
Wavelength, you might want to read up a little more on the arguments. From the quick summary of points I've read this will be truly nighmarish for many. Here's an interesting article that discusses some details:

http://blog.pappastax.com/index.php/2010/06/01/repeal-the-new-1099-law/

Although I an incorporated at this time I haven't actually made any business purchases yet but I am dreading the day that I do...

Regards,
Ryan


Thanks for posting this. If anyone has not read the article, I recommend that you do, since there seem to be erroneous conclusions in this thread.

This probably won't affect my teaching business much, as I don't usually make large purchases that exceed this amount. However, for my husband's web business (and s-corp), we issue about 4 1099s per year. Now, we'll be well above that. The point being that we already spend thousands per year having our taxes prepared, and this added level of complexity will not add up since there will still be many purchases made below the $600 mark unaccounted for. I really don't see the point of it.
_________________________
private piano/voice teacher - full time
MTNA member
www.valeoconservatory.com
Petrof 9'2 Concert, Yamaha G3, Roland FP-7, Yamaha MOX6, Kawai MP11

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#1479026 - 07/22/10 09:44 AM Re: New USA tax reporting requirement [Re: John v.d.Brook]
theJourney Offline
3000 Post Club Member

Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: John v.d.Brook
If I send "Tim's Computer" a 1099, and not the IRS, how will that help "remind" Tim to report his income? If he's a scofflaw, it will do nothing. There will be no change in tax receipts but a big reporting nuisance for small businesses.


One copy you keep, one copy goes to Tim and the third copy goes to the IRS (electronically, hopefully).

If Tim says he only sold 10000 in computers but there are 20000 worth of 1099s filed, then the IRS knows that it makes sense to audit Tim. If Tim knows that he will be audited if he cheats on his taxes by only reporting half of his sales, then he might stop cheating. If Tim doesn't stop cheating, then he will pay back taxes with interest and penalties.

If you report much more on 1099s year in and year out than you report as income, then you might also be an interesting business to audit.

Those of us who don't cheat on our taxes will benefit by not paying anymore for those freeloaders who do.


Edited by theJourney (07/22/10 09:46 AM)

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#1479047 - 07/22/10 10:08 AM Re: New USA tax reporting requirement [Re: theJourney]
John v.d.Brook Online   content
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How will I benefit if Tim pays his full taxes? Will my taxes go down? I'm not holding my breath. Will I receive more government services? I don't want any more "government services." I get too many of them already.

That not withstanding, I find the whole thing totally invasive and unnecessary.

What's unclear at this point is whether my students' tuition is a "product" which also has to be reported on a 1099. Does the IRS/Government really need to know who's taking piano lessons throughout the USA?
_________________________
"Those who dare to teach must never cease to learn." -- Richard Henry Dann
Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
Certified by the American College of Musicians; member NGPT, MTNA, WSMTA, OMTA

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#1479053 - 07/22/10 10:14 AM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Morodiene Offline
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Loc: Boynton Beach, FL
Originally Posted By: John v.d.Brook
Does the IRS/Government really need to know who's taking piano lessons throughout the USA?

Apparently! Big Brother is watching wink
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#1479058 - 07/22/10 10:20 AM Re: New USA tax reporting requirement [Re: John v.d.Brook]
wavelength Offline
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Registered: 11/23/07
Posts: 340
Loc: Vermont, USA
You don't have to send a 1099 to Tim's Computer. You have to send one to the IRS, and so does Tim. If you're using a credit/debit card for the purchase, the credit card company is required to report it *and you don't have to*.

edit: oh wait, you do have to send a copy to Tim. blech.

Don't get me wrong: I find the preferential treatment of credit card purchases to be creepy and potentially sinister. I also hate forms (especially 1099 which I have to use as a bandleader or solo pianist when I do corporate gigs IIRC). But even if I were to make all my business purchases in cash, this might mean I'd have to do one extra 1099 in a given year, maybe two. Realistically, though, I don't think I've made any major business purchases in cash, ever.

What if I did make 50 large cash purchases in a year, each from a different vendor and thus requiring 50 1099's? At most, that would mean writing Tax ID #'s on receipts at the time of purchase. At tax time It would probably mean an extra half hour of work for my tax preparer.



Edited by wavelength (07/22/10 10:23 AM)

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#1479067 - 07/22/10 10:27 AM Re: New USA tax reporting requirement [Re: Morodiene]
Monica K. Offline

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Registered: 08/10/05
Posts: 17815
Loc: Lexington, Kentucky
The article linked above included a footnote with an excerpt from Chris Edwards of the Cato Institute that illustrates to me the real problem with the law:

Businesses will have to issue 1099s whenever they do more than $600 of business with another entity in a year. For the $14 trillion U.S. economy, that’s a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS.

The only people who are going to benefit from this new law are the hordes of accountants business owners are going to have to hire to handle all these 1099s and the people the IRS will have to hire to process all the 1099s they receive. I seriously doubt we will see a massive jump in reported income as a result of the law.

*sigh*
_________________________
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My YouTube channel: http://www.youtube.com/pianomonica

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#1479073 - 07/22/10 10:33 AM Re: New USA tax reporting requirement [Re: wavelength]
Monica K. Offline

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Registered: 08/10/05
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Loc: Lexington, Kentucky
Originally Posted By: wavelength
What if I did make 50 large cash purchases in a year, each from a different vendor and thus requiring 50 1099's? At most, that would mean writing Tax ID #'s on receipts at the time of purchase. At tax time It would probably mean an extra half hour of work for my tax preparer.



Remember, it's not just single purchases over $600. It's any set of transactions with a single vendor that accumulates to more than $600 in a year. And that means that even if you don't know for sure you're going to spend more than $600 with a given vendor, you'd better keep track of it so you know when you have to file a 1099.

And it's not just a simple matter of writing down a tax number on a receipt. My hubby files those 1099s all the time in his coin business (you have to submit one for cash transactions that pass a certain limit, and lots of people pay cash when they buy bullion), and it's a whole form that needs to be filled out and then mailed to multiple recipients.

*sigh*
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#1479077 - 07/22/10 10:36 AM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Mark_C Offline
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Originally Posted By: John v.d.Brook
How will I benefit if Tim pays his full taxes? Will my taxes go down?.....

Pardon my saying so, but that reflects a view of taxes that doesn't extend much further than about an inch forward.

The answer to your seemingly rhetorical question is yes.

(That's an oversimplified answer, but you're being oversimplified yourself, so I'm just replying in kind.)
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#1479090 - 07/22/10 10:46 AM Re: New USA tax reporting requirement [Re: Mark_C]
Monica K. Offline

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Registered: 08/10/05
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Loc: Lexington, Kentucky
Here's a link to the actual form for those who have never seen a 1099 in the flesh:

http://www.irs.gov/pub/irs-pdf/f1099msc.pdf

p.s. Not sure this is the EXACT 1099 form; the IRS appears to have (surprise, surprise) many different versions of the 1099, but they all look pretty similar to this.


Edited by Monica K. (07/22/10 10:55 AM)
Edit Reason: added disclaimer
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#1479101 - 07/22/10 11:07 AM Re: New USA tax reporting requirement [Re: Mark_C]
Morodiene Offline
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Originally Posted By: Mark_C
Originally Posted By: John v.d.Brook
How will I benefit if Tim pays his full taxes? Will my taxes go down?.....

Pardon my saying so, but that reflects a view of taxes that doesn't extend much further than about an inch forward.

The answer to your seemingly rhetorical question is yes.

(That's an oversimplified answer, but you're being oversimplified yourself, so I'm just replying in kind.)


And what about the amount of taxes already given to the government? If the government were a business, it would have gone bankrupt long ago. There are so many excesses and inefficiencies that if they actually learned to run more like a business that needed to remain afloat, the money given could go a lot farther. As it stands right now, it's like putting good money after bad.
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#1479111 - 07/22/10 11:15 AM Re: New USA tax reporting requirement [Re: Monica K.]
theJourney Offline
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Registered: 02/22/07
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Originally Posted By: Monica K.
Businesses will have to issue 1099s whenever they do more than $600 of business with another entity in a year. For the $14 trillion U.S. economy, that’s a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS.

The only people who are going to benefit from this new law are the hordes of accountants business owners are going to have to hire to handle all these 1099s and the people the IRS will have to hire to process all the 1099s they receive. I seriously doubt we will see a massive jump in reported income as a result of the law.

*sigh*





One key thing to keep in mind is that it already is the law and has been the law for a long time that businesses properly record and keep this information. The only requirement that is being added is that the scope of coverage for actually producing a 1099 form is being proposed to be increased.

I agree that the 1099 solution is not nearly as effective as the efficient and modern systems that other countries have in place. Hopefully, this will just be an intermediate solution towards a fair and comprehensive Value Added Tax that will make all this paper shoving unneeded (and open the door to reduced income taxes).

However, your fears and the uncertainty and doubt being sown in some of the referenced articles have not been borne out by the existing 1099 process.

Considering the sky high rate of small business failure in the US, having small businesses be managed more professionally, including maintaining properly their legally required bookkeeping, will be a good thing. I can't imagine someone with a professional attitude towards teaching who would resist having a professional and responsible attitude towards their studio finances, including knowing exactly where and on what their money is being spent. I also can't imagine that a professional would not want to fulfill his or her legal duties to document their business transactions to demonstrate that they are not cheating on their taxes and stealing from their fellow citizens.

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#1479116 - 07/22/10 11:21 AM Re: New USA tax reporting requirement [Re: Mark_C]
John v.d.Brook Online   content
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Loc: Olympia, Washington, USA
Originally Posted By: Mark_C
Originally Posted By: John v.d.Brook
How will I benefit if Tim pays his full taxes? Will my taxes go down?.....

Pardon my saying so, but that reflects a view of taxes that doesn't extend much further than about an inch forward.

The answer to your seemingly rhetorical question is yes.

(That's an oversimplified answer, but you're being oversimplified yourself, so I'm just replying in kind.)

Pardon my saying so, but Hogwash.

Of course, my taxes won't go down. They almost never go down. But my expenses and income lost to accounting will go up.

2012 may be a good time to retire.
_________________________
"Those who dare to teach must never cease to learn." -- Richard Henry Dann
Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
Certified by the American College of Musicians; member NGPT, MTNA, WSMTA, OMTA

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#1479127 - 07/22/10 11:33 AM Re: New USA tax reporting requirement [Re: John v.d.Brook]
theJourney Offline
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Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: John v.d.Brook
Originally Posted By: Mark_C
Originally Posted By: John v.d.Brook
How will I benefit if Tim pays his full taxes? Will my taxes go down?.....

Pardon my saying so, but that reflects a view of taxes that doesn't extend much further than about an inch forward.

The answer to your seemingly rhetorical question is yes.

(That's an oversimplified answer, but you're being oversimplified yourself, so I'm just replying in kind.)

Pardon my saying so, but Hogwash.

Of course, my taxes won't go down. They almost never go down. But my expenses and income lost to accounting will go up.

2012 may be a good time to retire.


If you were to shop at a grocery store where a majority of shoppers shoplifted instead of paying for their groceries, I can assure you that you and those others paying for their groceries would pay much, much more to compensate for the revenue lost to theft.

The $300 to $500 billion per year stolen from you and your democratically elected government of the people, for the people and by the people is every bit as much money out of your pocket as the extra markup that you pay every time you shop in a retail store to pay for the losses from shoplifting.

To the extent that the upwards of half a trillion dollars per year is not spent to ensure that an environment exists in the US where kids get exposed to music in public schools and there is a middle class with sufficient disposable income to pay for music lessons, these tax evaders are also stealing food right out of your mouth too.

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#1479140 - 07/22/10 11:55 AM Re: New USA tax reporting requirement [Re: theJourney]
Minniemay Offline
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So does this mean the parents of our piano students will have to give us 1099s?
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#1479141 - 07/22/10 11:57 AM Re: New USA tax reporting requirement [Re: theJourney]
Piano*Dad Offline
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In any tax system (and in most policy design of any sort) there is a tradeoff between the virtues of simplicity and the virtues of information. More information means more effective targeting, i.e. you can redesign rates to be more effective at generating desired revenues. With rich and accurate reporting you can indeed get more revenue out of the existing rates, and thus lower rates where particular taxes (like those on income) have serious disincentive effects on work.

But collecting information is itself costly. How you collect it can set up traps for people, and as noted above we may wind up employing scarce resources (all those tax accountants and IRS agents) that ideally have socially more productive things to do than wring a few extra tax dollars out of scofflaws while eating up gobs of public resources (AKA their salaries).

New tax reporting processes, even if promulgated just to enforce existing rules, do not necessarily make things better if all the reporting costs create real barriers to productive enterprises.

In a sense, I'm siding with both sides. Monica is right to point out how the complexity of our processes imposes substantial business costs that may far outweigh the beneficial effects of garnering a few extra dollars of revenue. theJourney is also correct in noting that a substantial part of our problem is the inefficiency of the mechanisms we currently use in collecting information and tax revenues. And John is right that there are few examples of added tax collections (via stiff reporting requirements) that seem to have led, ipso facto, to lower tax rates elsewhere in the economy.

But a sensible redesign of our tax code and our information-collection processes could lead to a much better social outcome, if our political structures allowed people to cross party boundaries and compromise.

There is no reason to allow small businesses to evade taxes, and any 'everybody does it' or 'it's our fair pay back' kind of logic is not going to get any respect from me. And there is no reason to endure a tax system in which the accountant is an important resource for just about every family and every small business. That's a waste of labor power. Those extra accountants should be redirected over time into some socially more useful activity (along with lots of lawyers smile and probably a few economists). To reduce the demand for their services we need a tax code that is simpler and that does not require a blizzard of paper in which all sorts of things can be hidden or misplaced.

There are examples of politics working properly for the good of just about all. Some may be old enough to remember Bill Bradley working together with Ronald Reagan to craft a bi-partisan tax reform that reduced and eliminated many loopholes and exemptions in exchange for broad tax cuts. It worked, for a while. It can work again, especially if we can make the system more transparent by reducing the amount of paper people must process in order to understand their position and determine what they actually owe.
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#1479158 - 07/22/10 12:14 PM Re: New USA tax reporting requirement [Re: Minniemay]
Andy Platt Offline
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Registered: 04/28/10
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Loc: Virginia, USA
Originally Posted By: Minniemay
So does this mean the parents of our piano students will have to give us 1099s?


Not unless they are a business. It's business-business transactions.
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#1479160 - 07/22/10 12:19 PM Re: New USA tax reporting requirement [Re: Piano*Dad]
John v.d.Brook Online   content
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This thread, which I started because of comments I heard on CNBC (a financial television channel I was watching as I was washing up the dishes, and wanting to know how the market had performed for the day) mentioned that purchases in excess of $600 would require businesses submit to the IRS a form 1099 documenting the purchase.

I immediately thought of the new washer and dryer we purchased last fall. What business is it of the government to know that I personally purchased a new washer dryer.

As soon as I finished the dishes, I began a search to discover what implications it would have on my teaching business. And that's what I reported.

For those of you who are making snarky comments about teachers not reporting income, I suggest you take it somewhere else. Most of us, and at least me personally, are very scrupulous and honest in our reporting. It's a pain, but I really don't want to pay a big fine or do jail time.

I am sending a request to our national teacher's organization, MTNA, to have their legal counsel investigate and asking them to publish in American Music Teacher, the monthly journal, what the results of their findings are.

I will report back to the forum anything of interest they provide.
_________________________
"Those who dare to teach must never cease to learn." -- Richard Henry Dann
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Certified by the American College of Musicians; member NGPT, MTNA, WSMTA, OMTA

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#1479161 - 07/22/10 12:19 PM Re: New USA tax reporting requirement [Re: Piano*Dad]
Monica K. Offline

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Registered: 08/10/05
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Loc: Lexington, Kentucky
Originally Posted By: Piano*Dad
There is no reason to allow small businesses to evade taxes, and any 'everybody does it' or 'it's our fair pay back' kind of logic is not going to get any respect from me. And there is no reason to endure a tax system in which the accountant is an important resource for just about every family and every small business. That's a waste of labor power. Those extra accountants should be redirected over time into some socially more useful activity (along with lots of lawyers smile and probably a few economists). To reduce the demand for their services we need a tax code that is simpler and that does not require a blizzard of paper in which all sorts of things can be hidden of misplaced.


Great post, piano*dad. You outline very nicely my objection to the new regulations, which is NOT that it is leading to new taxes but rather that it is an inefficient mechanism that will create a significant burden for small business owners and sole proprietors.
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#1479162 - 07/22/10 12:20 PM Re: New USA tax reporting requirement [Re: Andy Platt]
John v.d.Brook Online   content
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Registered: 03/18/06
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Loc: Olympia, Washington, USA
Originally Posted By: Andy Platt
Originally Posted By: Minniemay
So does this mean the parents of our piano students will have to give us 1099s?


Not unless they are a business. It's business-business transactions.


Andy, this may be true, but this is not what CNBC reported.
_________________________
"Those who dare to teach must never cease to learn." -- Richard Henry Dann
Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
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#1479165 - 07/22/10 12:23 PM Re: New USA tax reporting requirement [Re: theJourney]
Mark_C Offline
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Registered: 11/11/09
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Loc: New York
Originally Posted By: theJourney
If you were to shop at a grocery store where a majority of shoppers shoplifted instead of paying for their groceries, I can assure you that you and those others paying for their groceries would pay much, much more to compensate for the revenue lost to theft....

Perfect analogy.
Thank you. smile

Hopefully he won't say "Hogwash" to you too. ha

(It's exactly the same thing.)
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#1479169 - 07/22/10 12:28 PM Re: New USA tax reporting requirement [Re: Piano*Dad]
Mark_C Offline
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Registered: 11/11/09
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Loc: New York
Originally Posted By: Piano*Dad
.....In a sense, I'm siding with both sides....

And actually, me too.

I wouldn't relish having to do more paperwork. I have more than enough already, as does everyone else.

But before we draw conclusions about this (especially tunnel-visioned ones), let's understand exactly what this would be -- and let's try to understand how it fits in with the big picture.

Which requires more than just looking at it and screaming "Dammit this sucks."
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#1479171 - 07/22/10 12:30 PM Re: New USA tax reporting requirement [Re: Mark_C]
John v.d.Brook Online   content
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Registered: 03/18/06
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Monika, you and your husband have my sympathy. The CNBC story focused on the impact of the new law on coin dealers.

As many know, a lot of Americans are buying gold coins as a hedge against inflation and the dollar collapse. Each Golden Eagle, Canadian Maple Leaf, or Krugerrand, would have their purchase recorded and reported to the IRS.

One supposes that this is prelude to confiscation of gold like FDR did back in the '30s.
_________________________
"Those who dare to teach must never cease to learn." -- Richard Henry Dann
Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
Certified by the American College of Musicians; member NGPT, MTNA, WSMTA, OMTA

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#1479174 - 07/22/10 12:33 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Mark_C Offline
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Registered: 11/11/09
Posts: 19871
Loc: New York
Originally Posted By: John v.d.Brook
I immediately thought of the new washer and dryer we purchased last fall. What business is it of the government to know that I personally purchased a new washer dryer.....

Unless I grossly misunderstand what this requirement might be (even in any imagined extreme form), you are exploding its meaning into absurdity.

Were the washer and dryer business purchases?
Assuming they weren't, how does this come into the discussion?

About reporting or failing to report income: Nobody was talking about whether YOU do or don't report income; they're talking about practices in general. It seems like somehow you're not inclined to look at how a tax rule affects the larger picture (and how the larger picture affects you).
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#1479175 - 07/22/10 12:35 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
theJourney Offline
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Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: John v.d.Brook
For those of you who are making snarky comments about teachers not reporting income, I suggest you take it somewhere else. Most of us, and at least me personally, are very scrupulous and honest in our reporting. It's a pain, but I really don't want to pay a big fine or do jail time.


Perhaps I missed it, but I haven't seen anyone making snarky comments about teachers not reporting income.

Originally Posted By: John v.d.Brook
Originally Posted By: Andy Platt
Originally Posted By: Minniemay
So does this mean the parents of our piano students will have to give us 1099s?


Not unless they are a business. It's business-business transactions.


Andy, this may be true, but this is not what CNBC reported.


Well, I can certainly recommend that people try to get their news from newspapers and quality periodicals rather than from television. Television news is meant to visually entertain and to sell advertising. Their purpose is to get people Excited and to stay tuned, not necessarily to properly inform them. Television does not lend itself for in-depth reporting, reasonable detail nor for nuance. IMO, the best thing about television is the "off" switch.

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#1479176 - 07/22/10 12:37 PM Re: New USA tax reporting requirement [Re: Mark_C]
Monica K. Offline

Platinum Supporter until Dec 31 2012


Registered: 08/10/05
Posts: 17815
Loc: Lexington, Kentucky
Here's an excerpt from an article about the new rules in CNNMoney.com

Henschke's group had previously surveyed its members and learned that they average 10 filings a year of 1099 forms, each of which takes about half an hour to prepare. That's in line with the GAO report, which found that a typical small business spent between three and five hours per year filing 1099s.

But SMC's survey found that extending 1099s just to services purchased from corporations would push that number to at least 200 filings per year for a typical small business -- adding an estimated $6,000 to the cost of preparing the average tax return. And that's without even accounting for the requirement that 1099s be filed for purchases of goods, a provision that Henschke's group didn't see coming when it conducted its survey last year.


The new rules are not just a minor inconvenience of submitting a couple of extra forms at tax time. $6K in extra accounting costs will be a real hardship for a lot of small businesses. frown
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#1479179 - 07/22/10 12:38 PM Re: New USA tax reporting requirement [Re: Mark_C]
jotur Offline
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Registered: 09/16/06
Posts: 5658
Loc: Santa Fe, NM
Just a note here. I'm not against paying taxes. I report all my income from bookkeeping even if it's not enough from a particular client to get a 1099 from them. So I'm not into evading taxes.

With QuickBooks, which many miniscule and small businesses use, keeping track is not a bigger problem than what I already do for my clients. The reports are already there.

But someone said "It's a 1/2 hour extra for my tax preparer." But it's a 1/2 hour (or more) for every one of your tax preparer's clients, some of whom may be a lot bigger than you. I send out the 1099's for my clients, not their tax preparer, so for me it's extra for each client I have. It's going to be more than 1/2 hour extra in total.

They pay me, which may seem like an advantage to me, but ya know, there's always trade-offs. This is, as we say, another nickle in the nickle-and-diming to death category in terms of time.

And do we really think that having every business in the country sending in 1099's to Office Max is going to make a difference in how Office Max files their taxes? Or 1099s to the phone company? What a waste.

And those who want to evade taxes - will. Where there's a will there's a way smile

No, I don't think for miniscule businesses own tax reporting it will be that much extra. Not for my bookkeeping, not for a couple of my clients. But there's a big middle for whom this will, as some here say, suck up a lot of resources that could have been used elsewhere. Creating more bookkeeping jobs like the ones that track and report this - oh well.

Cathy
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#1479180 - 07/22/10 12:38 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
theJourney Offline
3000 Post Club Member

Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: John v.d.Brook
As many know, a lot of Americans are buying gold coins as a hedge against inflation and the dollar collapse. Each Golden Eagle, Canadian Maple Leaf, or Krugerrand, would have their purchase recorded and reported to the IRS.

One supposes that this is prelude to confiscation of gold like FDR did back in the '30s.


We have gone from tax reporting requirements to tin foil hats in record time here. smile

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#1479185 - 07/22/10 12:45 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Monica K. Offline

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Registered: 08/10/05
Posts: 17815
Loc: Lexington, Kentucky
Originally Posted By: John v.d.Brook
Monika, you and your husband have my sympathy. The CNBC story focused on the impact of the new law on coin dealers.

As many know, a lot of Americans are buying gold coins as a hedge against inflation and the dollar collapse. Each Golden Eagle, Canadian Maple Leaf, or Krugerrand, would have their purchase recorded and reported to the IRS.

One supposes that this is prelude to confiscation of gold like FDR did back in the '30s.


Yeah... the coin industry is not at all happy about this. I'm not sure we'd have to file 1099s on retail purchases to and from private individuals (beyond the $10,000 in cash sales trigger for 1099 reporting that currently exists), but we do a lot of wholesale business, the vast majority of which is above $600 that will now require 1099 forms. frown

[edit: Looks like retail purchases ARE included under the new law, yikes!]


Edited by Monica K. (07/22/10 02:47 PM)
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#1479186 - 07/22/10 12:46 PM Re: New USA tax reporting requirement [Re: Mark_C]
Piano*Dad Offline
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Originally Posted By: Mark_C
Originally Posted By: theJourney
If you were to shop at a grocery store where a majority of shoppers shoplifted instead of paying for their groceries, I can assure you that you and those others paying for their groceries would pay much, much more to compensate for the revenue lost to theft....

Perfect analogy.
Thank you. smile

Hopefully he won't say "Hogwash" to you too. ha

(It's exactly the same thing.)


Well, I understand the analogy, but it's far from perfect. There is a big difference between firms that operate in a competitive market and a government that has monopoly power over the tax base.

For firms subject to shoplifting, that is a cost of business and it must be paid for. Shoplifting translates directly into higher prices to consumers. If firms figure out a way to reduce shoplifting, the benefits of that will translate into higher profit for a while, but over time it'll translate into lower prices as competition drives profit back to long run normal levels.

Tax evasion by some does not necessarily translate into higher taxes for everyone else, because unlike firms in a competitive market the government has no 'bottom line.' There is no set amount of revenue it must raise come hell or high water. Evasion by some need not imply higher taxes on others. It could mean a smaller government instead. I didn't say that was good. Smaller government means fewer services or transfers. You judge that as you will.

But tax evasion by some does not automatically mean higher taxes on others. It does mean higher taxes than you might have to levy in a more perfect system, but that's not quite the same thing.
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#1479192 - 07/22/10 12:51 PM Re: New USA tax reporting requirement [Re: Piano*Dad]
Piano*Dad Offline
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Quote:
IMO, the best thing about television is the "off" switch.


grin

True, even if it's CNBC.
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#1479196 - 07/22/10 12:56 PM Re: New USA tax reporting requirement [Re: Piano*Dad]
theJourney Offline
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There are also other societal costs to tax evasion that are considerable. One I have already mentioned up thread: taxes are used to create an environment that allows all of us to prosper and earn our livings. To the extent that public policy and society objectives are thwarted by an unnecessary lack of funds, these costs are high.

For example, just as prohibition brought about a wave of institutionalized hypocrisy and acceptance of breaking the law as justified and normal in the US population that persists until today, it is also true that widespread tax evasion that is not enforced against has a negative impact on the norms and mores of a society. If cheating and stealing and winking becomes the standard, then the areas in which corruption and graft is considered normal will increase. Levels of mutual trust will decrease. Trust is a requirement of a well-functioning and effective liberal market democracy and civilized society.

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#1479200 - 07/22/10 01:05 PM Re: New USA tax reporting requirement [Re: theJourney]
Mark_C Offline
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^^ That's an admirably sophisticated view that is a breath of fresh air alongside some of the tunnel-visioned stuff we're seeing on here.

Great post, and greatly said. It's an important angle of the subject.

If we can't see beyond ourself and the next 10 minutes, we can't grasp what any of this is about.
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#1479202 - 07/22/10 01:08 PM Re: New USA tax reporting requirement [Re: Mark_C]
Piano*Dad Offline
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Quote:
widespread tax evasion that is not enforced against has a negative impact on the norms and mores of a society. If cheating and stealing and winking becomes the standard, then the areas in which corruption and graft is considered normal will increase.


Welcome to Argentina, or Greece, though those two are hardly alone.
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#1479218 - 07/22/10 01:38 PM Re: New USA tax reporting requirement [Re: Piano*Dad]
John v.d.Brook Online   content
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Originally Posted By: Piano*Dad
Quote:
IMO, the best thing about television is the "off" switch.


grin

True, even if it's CNBC.

Well, this hasn't been reported in our local paper; nor has it been reported in any of the financial journals (that I can find) and I didn't see it in the Wall Street Journal, so perhaps we shouldn't be so quick to condemn the tv. It turns out that it did appear in an op-ed on May 27th, of all days, and I remember reading much of it, but I totally missed the implications for piano teachers.
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#1479228 - 07/22/10 01:51 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Mark_C Offline
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Are you still thinking that you'd have to report stuff like your washer/dryer purchase?
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#1479230 - 07/22/10 01:54 PM Re: New USA tax reporting requirement [Re: Mark_C]
John v.d.Brook Online   content
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If retail coin sales have to be reported, which are not business to business, then it's possible all large consumer purchases may have to be reported. I haven't downloaded the final bill, and don't have time to dig further. Hopefully, there will be enough hue and cry over this that it gets dropped in its entirety.
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#1479253 - 07/22/10 02:46 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Monica K. Offline

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Hmm... I just spent a half hour googling, and I think the new law DOES cover retail purchases, not just business to business. Yikes. It's worse than I thought.

I think John's washer/dryer purchase wouldn't be included, though... I think the new regs apply only to business-related purchases and sales. So unless John diversifies by offering to do students' laundry during their lessons, he's safe. grin
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#1479255 - 07/22/10 02:51 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
theJourney Offline
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Originally Posted By: John v.d.Brook

Well, this hasn't been reported in our local paper; nor has it been reported in any of the financial journals (that I can find) and I didn't see it in the Wall Street Journal, so perhaps we shouldn't be so quick to condemn the tv. It turns out that it did appear in an op-ed on May 27th, of all days, and I remember reading much of it, but I totally missed the implications for piano teachers.


Well, a number of the referenced articles goes back as much as a full month before.

For our understanding, could you articulate for us what you see as "the implications for piano teachers" in terms of time and effort and any other relevant considerations based on the understanding that you gained from the CNBC report?


Edited by theJourney (07/22/10 02:51 PM)

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#1479260 - 07/22/10 03:03 PM Re: New USA tax reporting requirement [Re: theJourney]
Monica K. Offline

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[Edit: I got part of this wrong and am deleting in the interest of not spreading more misinformation.]

The average piano teacher probably would be filling out far fewer 1099s than the typical small business, but if it really takes 20-30 min. to do each form, it can add up in time and hassle.



Edited by Monica K. (07/22/10 03:43 PM)
Edit Reason: I was wrong, dang it.
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#1479265 - 07/22/10 03:09 PM Re: New USA tax reporting requirement [Re: Monica K.]
BDB Offline
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Not likely! Do you think grocery stores will be required to get W9s from all of their customers in case they spend $600 a year?
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#1479274 - 07/22/10 03:22 PM Re: New USA tax reporting requirement [Re: theJourney]
John v.d.Brook Online   content
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Originally Posted By: theJourney
For our understanding, could you articulate for us what you see as "the implications for piano teachers" in terms of time and effort and any other relevant considerations based on the understanding that you gained from the CNBC report?

I listed several types of expenditures in my initial post. This past year, I purchased a new hand-held recorder. It would require reporting. I purchased a new microphone for my studio's camcorder, so students could have better audio on their take home DVDs; It would require reporting. I purchased a new computer for my studio's office; it would require reporting. One other piece of equipment I purchased for my studio was a new zoom lens which came in just over the reporting $ limit. I like to take snaps of my students at various events so I can post them in the studio. That would require reporting.

I'm just a one man operation and immediately, I see six or more hours of additional work and for what? So some bureaucrat can justify his desk job in Washington?

Oops, I forgot, I purchase some adjustable benches for students (at discount) so that, too, would require reporting.

Of course, I itemize these purchases on Schedule C, but preparing 1099s looks like it's going to be a boat load of additional work.
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#1479280 - 07/22/10 03:31 PM Re: New USA tax reporting requirement [Re: Monica K.]
Morodiene Offline
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Originally Posted By: Monica K.
Originally Posted By: John v.d.Brook
Monika, you and your husband have my sympathy. The CNBC story focused on the impact of the new law on coin dealers.

As many know, a lot of Americans are buying gold coins as a hedge against inflation and the dollar collapse. Each Golden Eagle, Canadian Maple Leaf, or Krugerrand, would have their purchase recorded and reported to the IRS.

One supposes that this is prelude to confiscation of gold like FDR did back in the '30s.


Yeah... the coin industry is not at all happy about this. I'm not sure we'd have to file 1099s on retail purchases to and from private individuals (beyond the $10,000 in cash sales trigger for 1099 reporting that currently exists), but we do a lot of wholesale business, the vast majority of which is above $600 that will now require 1099 forms. frown

[edit: Looks like retail purchases ARE included under the new law, yikes!]
Expect a lot of $599 purchases in the coming year smile
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#1479282 - 07/22/10 03:35 PM Re: New USA tax reporting requirement [Re: Monica K.]
Barb860 Offline
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Originally Posted By: Monica K.
The article linked above included a footnote with an excerpt from Chris Edwards of the Cato Institute that illustrates to me the real problem with the law:

Businesses will have to issue 1099s whenever they do more than $600 of business with another entity in a year. For the $14 trillion U.S. economy, that’s a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS.

The only people who are going to benefit from this new law are the hordes of accountants business owners are going to have to hire to handle all these 1099s and the people the IRS will have to hire to process all the 1099s they receive. I seriously doubt we will see a massive jump in reported income as a result of the law.

*sigh*




Ya think the IRS will be able to adequately and efficiently process all of this additional paperwork, even with more folks hired there?
smirk
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#1479287 - 07/22/10 03:41 PM Re: New USA tax reporting requirement [Re: BDB]
Monica K. Offline

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Registered: 08/10/05
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Originally Posted By: BDB
Not likely! Do you think grocery stores will be required to get W9s from all of their customers in case they spend $600 a year?


You're right, BDB, and I was/am confused. Fortunately, after spending WAY too much time googling, I finally found a blog that links to the actual tax code being affected:

Sec. 6041. Information at source

(a) Payments of $600 or more
All persons engaged in a trade or business and making payment in the course of such trade or business to another person, of rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income (other than payments to which section 6042(a)(1), 6044(a)(1), 6047(e), 6049(a), or 6050N(a) applies, and other than payments with respect to which a statement is required under the authority of section 6042(a)(2), 6044(a)(2), or 6045), or $600 or more in any taxable year, or, in the case of such payments made by the United States, the officers or employees of the United States having information as to such payments and required to make returns in regard thereto by the regulations hereinafter provided for, shall render a true and accurate return to the Secretary, under such regulations and in such form and manner and to such extent as may be prescribed by the Secretary, setting forth the amount of such gains, profits, and income, and the name and address of the recipient of such payment.


The new laws make the following changes to that code:

SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

(a) INGENERAL.—Section 6041 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsections:

(h) APPLICATION TO CORPORATIONS.—Notwithstanding any regulation prescribed by the Secretary before the date of the enactment of this subsection, for purposes of this section the term ‘person’ includes any corporation that is not an organization exempt from tax under section 501(a).

(i) REGULATIONS.—The Secretary may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.’’.

(b) PAYMENTS FOR PROPERTY AND OTHER GROSS PROCEEDS.—
Subsection (a) of section 6041 of the Internal Revenue Code of 1986 is amended—

(1) by inserting ‘‘amounts in consideration for property,’’ after ‘‘wages,’’,

(2) by inserting ‘‘gross proceeds,’’ after ‘‘emoluments, or other’’, and

(3) by inserting ‘‘gross proceeds,’’ after ‘‘setting forth the amount of such’’.

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to payments made after December 31, 2011.


There. That clears everything up, doesn't it? wink
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#1479293 - 07/22/10 03:54 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
theJourney Offline
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Originally Posted By: John v.d.Brook
I listed several types of expenditures in my initial post. This past year, I purchased a new hand-held recorder. It would require reporting. I purchased a new microphone for my studio's camcorder, so students could have better audio on their take home DVDs; It would require reporting. I purchased a new computer for my studio's office; it would require reporting. One other piece of equipment I purchased for my studio was a new zoom lens which came in just over the reporting $ limit. I like to take snaps of my students at various events so I can post them in the studio. That would require reporting.

I'm just a one man operation and immediately, I see six or more hours of additional work and for what? So some bureaucrat can justify his desk job in Washington?

Oops, I forgot, I purchase some adjustable benches for students (at discount) so that, too, would require reporting.

Of course, I itemize these purchases on Schedule C, but preparing 1099s looks like it's going to be a boat load of additional work.


Well, presumably you are not buying new benches, a new computer and new recorders and cameras and zoom lenses every year, so in your case and in the case of 99% of solo piano teachers the amount of transactions would seem to be tiny indeed on average every year. If you are buying new ones each year, that might be an explanation why you are earning less from your business than you want. You might buy $600 worth of tuning for which you might already prepare a form for in addition to perhaps $600 of recital hall/catering costs or office supply costs or sheet music costs at one vendor. I am at a loss to think of anything else and apparently you are too.

And, for these items you mentioned you are already required to keep receipts for, be able to demonstrate need for your business, verify that they are tax deductible business expenses, show that you are not using them for personal use and in some cases only deduct an amount for depreciation per year above a tolerance amount and up to a certain maximum instead of the whole purchase amount in the year of purchase. So, already you must completely account for them as a professional, responsible, independent businessman.

Most small business people, even one-man contracting companies, use some kind of online banking or PC or internet based method of recording and documenting these purchases to prepare their own taxes or to provide the details to their accountant. If you don't now, then now is a good time as any to actually start easily and efficiently meeting one's duties and taking care of one's professional obligations using low cost or free tools widely available today, regardless of any 1099 reporting requirements.

None of us know what the requirements or process will be in 2012 since that has yet to be determined. However, if the US follows the lead of other countries in this area, the reporting will be automated either transmitting the data electronically automatically from your accounting records or allowing you or your bookkeeper/accountant to enter them easily online for electronic transfer. If the forms must be produced on paper, the software will also be able to print them automatically at the end of the year.

So, in the worst case we are looking at perhaps a maximum of one or two more hours of your time per year above the normal, everyday bookkeeping requirements that you must already meet today to avoid breaking the law or neglecting your professional business duties to prepare a couple of forms.

Someone in Washington with a desk job won't have to spend a second on it, since the process is automated (it is the year 2010 after all). So, the extra cost and effort is minimal for you or the country, but the ability in aggregate to start clawing back some of those hundreds of billions of stolen tax receipts is greatly enhanced.

Your worries sound like a tempest in a teacup to me.

If one of my piano students told me after I asked them to do one or two more hours work for me spread out during the course of an entire year's work of lessons -- or even six hours of additional work over a course of a year -- that "it's going to be a boatload of additional work" that "really hits hard", "saddling him up with minutiae" and "a big nuisance" and "totally invasive and unnecessary" and then threatening to quit (retire) in frustration because of this travesty, I would, besides the difficulty of trying to keep a straight face and not break out in a giggle, probably not be able to take him too seriously. I would certainly question his commitment and judgement.


Edited by theJourney (07/22/10 04:22 PM)

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#1479301 - 07/22/10 04:12 PM Re: New USA tax reporting requirement [Re: theJourney]
Morodiene Offline
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Originally Posted By: theJourney
Originally Posted By: John v.d.Brook
I listed several types of expenditures in my initial post. This past year, I purchased a new hand-held recorder. It would require reporting. I purchased a new microphone for my studio's camcorder, so students could have better audio on their take home DVDs; It would require reporting. I purchased a new computer for my studio's office; it would require reporting. One other piece of equipment I purchased for my studio was a new zoom lens which came in just over the reporting $ limit. I like to take snaps of my students at various events so I can post them in the studio. That would require reporting.

I'm just a one man operation and immediately, I see six or more hours of additional work and for what? So some bureaucrat can justify his desk job in Washington?

Oops, I forgot, I purchase some adjustable benches for students (at discount) so that, too, would require reporting.

Of course, I itemize these purchases on Schedule C, but preparing 1099s looks like it's going to be a boat load of additional work.


Well, presumably you are not buying new a new computer and new recorders and cameras and zoom lenses every year, so in your case the amount of transactions would seem to be tiny indeed on average every year.

And, for all of these items mentioned you are already reqto keep receipts for, be able to demonstrate need for your business, verify that they are deductible business expenses and in some cases only deduct an amount for depreciation per year above a tolerance amount and up to a certain maximum. So, already you must completely account for them. Most small business people, even one-man contracting companies use some kind of PC or internet based method of recording and documenting these transactions. If you don't now, then it is a good time to actually start meeting one's duties and taking care of one's professional obligations, regardless of any 1099 reporting requirements.

We don't know what the requirements or process will be in 2012 since that has yet to be determined, however, if the US follows the lead of other countries in this area,


When I have my accountant do my taxes (they are way too complicated for me to do them, even though I have a lot of accounting and tax experience), I give him the totals from my computer programs in Quickbooks and Quicken, which have tallied up all my purchases and categorized them as I entered them. I then tell my accountant that I had $XXX.XX in expenses for office supplies, $XXX.XX in professional development costs, etc. I do not give him the name, address and tax id itemization of each. I would have to enter that information in for every purchase made, then provide that itemized list. There is a list you can print from Quickbooks I believe for 1099 vendors. So now I have to pay my accountant to go through and produce all of these 1099s, when normally I'd only need one! I'm not sure what it will cost me, but already I pay a hefty sum for taxes since we have an s-corp in addition to my teaching business and two rental properties. With my husband's business, he *does* buy equipment every year and so many things would qualify to report 1099s on.

This is the problem. And I do keep my receipts and am very diligent about entering information into Quickbooks and Quicken. The point is, why add this burden? How and who is this helping? If people want to evade taxes, then they will do so. Does that make it OK to add more work for those who actually spend the time to do the right thing in the first place?
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#1479313 - 07/22/10 04:34 PM Re: New USA tax reporting requirement [Re: Morodiene]
theJourney Offline
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Originally Posted By: Morodiene
This is the problem. And I do keep my receipts and am very diligent about entering information into Quickbooks and Quicken. The point is, why add this burden? How and who is this helping? If people want to evade taxes, then they will do so. Does that make it OK to add more work for those who actually spend the time to do the right thing in the first place?


It doesn't sound like you will have much additional burden at all. Entering 20 or 30 vendors once in quicken and then also selecting a vendor field on maybe 100 transactions per year will take a few extra minutes per year. Maybe you will need to make 2 or 3 or at worse 6-10 1099s (likely automatically).

As you know, being an independent business person brings certain adult responsibilities with it including accounting and bookkeeping. If you were to take a job at Wal*Mart you would not have to do that, but Wal*Mart will be doing it for you. The same if you go to work as a music teacher at your local school system.

I sympathize with you that you live under a very complex, backwards and inefficient tax regime and that there are not free tools today made available to easily do your own taxes without paying for an accountant. However, short of moving to another country, getting a job instead of being your own boss or voting for progressive changes to the status quo, that is the reality you have to deal with. It could be worse, you could be trying to run your studio in Somalia or somewhere where your daily worries are how to get clean water and avoid being shot on the street on your way to the market.

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#1479329 - 07/22/10 04:54 PM Re: New USA tax reporting requirement [Re: theJourney]
John v.d.Brook Online   content
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Journey, you're rationalizing.

There is no real solid reason to saddle millions of honest tax payers and small business people with this additional reporting requirement.

Regardless of what you might think, not all businesses are constructed fully automated. Twenty-five odd years ago, when PCs were in their infancy, I began working on spread sheets to maintain my accounts. I have never transitioned to Quick Books, or other programs, mainly because even today, they do not do billing the way I want to do billing. I'd have to spend $$$ to purchase specialized software to handle tuition billing and why reinvent the wheel.

My point in starting this thread was to let teachers know that there is a major headache coming our way, and to be ready for it. Of course, I'm going to encourage my Congressman to vote to repeal it, and hopefully, millions of angry voters will persuade Congress to do something about it.

As for my studio expenses, I offer my students a quality music education, which includes modern and up to date equipment. If you wish to teach on an out of tune clunker of a piano, in a dimly lit room, fine. Don't saddle the rest of us with this tightwad approach.
_________________________
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Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
Certified by the American College of Musicians; member NGPT, MTNA, WSMTA, OMTA

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#1479343 - 07/22/10 05:11 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
theJourney Offline
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Originally Posted By: John v.d.Brook
Journey, you're rationalizing.

There is no real solid reason to saddle millions of honest tax payers and small business people with this additional reporting requirement.

Regardless of what you might think, not all businesses are constructed fully automated. Twenty-five odd years ago, when PCs were in their infancy, I began working on spread sheets to maintain my accounts. I have never transitioned to Quick Books, or other programs, mainly because even today, they do not do billing the way I want to do billing. I'd have to spend $$$ to purchase specialized software to handle tuition billing and why reinvent the wheel.

My point in starting this thread was to let teachers know that there is a major headache coming our way, and to be ready for it. Of course, I'm going to encourage my Congressman to vote to repeal it, and hopefully, millions of angry voters will persuade Congress to do something about it.

As for my studio expenses, I offer my students a quality music education, which includes modern and up to date equipment. If you wish to teach on an out of tune clunker of a piano, in a dimly lit room, fine. Don't saddle the rest of us with this tightwad approach.


OK. I get it.

You have completely unique and specialized requirements for recording your 10 or 12 different kinds of expenses each year that no one else understands and that would require spending a fortune on specialized software to meet your needs. What other people can easily do in minutes will take you hours and hours of pain and torture. Spending an hour or two yping out 3 or 4 1099s from the totals on your spreadsheets will be like losing your liberty as a free American and is good reason to retire from teaching. smile

I have it figured out. You want to make up stuff and whine and have an ideologically motivated emotional rant while avoiding a rational discussion. I understand. Sorry I tried to shine sun on your rainy parade! I wish you a nice adrenaline rush. Think of your heart. wink

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#1479346 - 07/22/10 05:17 PM Re: New USA tax reporting requirement [Re: theJourney]
Stanny Offline
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It hardly seems like a "major headache" to me.
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#1479355 - 07/22/10 05:37 PM Re: New USA tax reporting requirement [Re: Stanny]
Lollipop Offline
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I'm getting a headache just trying to figure out what the code says in Monica's post!
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#1479366 - 07/22/10 05:48 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
BDB Offline
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Originally Posted By: John v.d.Brook
Journey, you're rationalizing.

There is no real solid reason to saddle millions of honest tax payers and small business people with this additional reporting requirement.

Regardless of what you might think, not all businesses are constructed fully automated. Twenty-five odd years ago, when PCs were in their infancy, I began working on spread sheets to maintain my accounts. I have never transitioned to Quick Books, or other programs, mainly because even today, they do not do billing the way I want to do billing. I'd have to spend $$$ to purchase specialized software to handle tuition billing and why reinvent the wheel.

My point in starting this thread was to let teachers know that there is a major headache coming our way, and to be ready for it. Of course, I'm going to encourage my Congressman to vote to repeal it, and hopefully, millions of angry voters will persuade Congress to do something about it.

As for my studio expenses, I offer my students a quality music education, which includes modern and up to date equipment. If you wish to teach on an out of tune clunker of a piano, in a dimly lit room, fine. Don't saddle the rest of us with this tightwad approach.


This is not a major change. You have been required to do this reporting for some businesses for a long time. The change is that you might be required to do it for more businesses.
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#1479370 - 07/22/10 05:50 PM Re: New USA tax reporting requirement [Re: Monica K.]
John v.d.Brook Online   content
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Originally Posted By: Monica K.
After spending WAY too much time googling, I finally found a blog that links to the actual tax code being affected:

[i] Sec. 6041. Information at source

(a) Payments of $600 or more.....

Thanks, Monica. Time to kill all the lawyers!
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#1479373 - 07/22/10 05:53 PM Re: New USA tax reporting requirement [Re: BDB]
John v.d.Brook Online   content
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Originally Posted By: BDB
You have been required to do this reporting for some businesses for a long time. The change is that you might be required to do it for more businesses.

To the best of my knowledge, piano teachers have not been required to submit form 1099s to the IRS on our purchases of $600 or more. Or for any purchase of any amount.
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#1479377 - 07/22/10 05:58 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
BDB Offline
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Yes, they have. I get asked to fill out W9s from a number of businesses that think they might pay me $600 a year, and I get 1099s from them if I do get paid that much.
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#1479391 - 07/22/10 06:31 PM Re: New USA tax reporting requirement [Re: BDB]
Minniemay Offline
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The only expense I can think of that would get anywhere near the $600 mark is my piano technician or if I were to purchase a new instrument.
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#1479392 - 07/22/10 06:33 PM Re: New USA tax reporting requirement [Re: BDB]
jotur Offline
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Originally Posted By: BDB
Yes, they have. I get asked to fill out W9s from a number of businesses that think they might pay me $600 a year, and I get 1099s from them if I do get paid that much.


Yes, those are for services, I bet. The new part here is for merchandise. That hasn't required a 1099 before.

Cathy
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#1479394 - 07/22/10 06:50 PM Re: New USA tax reporting requirement [Re: jotur]
Lollipop Offline
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Registered: 07/28/09
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Is it just merchandise, or ANY expense over $600?

Quote:
making payment ... to another person, of rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income


For example, my son claims travel expenses. Will he have to send forms to airlines? It does say "person" - does that mean individuals only, not businesses?
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#1479409 - 07/22/10 07:21 PM Re: New USA tax reporting requirement [Re: Lollipop]
jotur Offline
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The other new part is that they need to be sent to corporations. Currently it's only services provided by non-corporations.

So, yes, as it stands, without the regulations yet, one would have to send them to hotels, airlines, music stores, etc, which previously didn't need to have them sent.

Cathy
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#1479415 - 07/22/10 07:49 PM Re: New USA tax reporting requirement [Re: theJourney]
Morodiene Offline
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Originally Posted By: theJourney
Originally Posted By: Morodiene
This is the problem. And I do keep my receipts and am very diligent about entering information into Quickbooks and Quicken. The point is, why add this burden? How and who is this helping? If people want to evade taxes, then they will do so. Does that make it OK to add more work for those who actually spend the time to do the right thing in the first place?


It doesn't sound like you will have much additional burden at all. Entering 20 or 30 vendors once in quicken and then also selecting a vendor field on maybe 100 transactions per year will take a few extra minutes per year. Maybe you will need to make 2 or 3 or at worse 6-10 1099s (likely automatically).

As you know, being an independent business person brings certain adult responsibilities with it including accounting and bookkeeping. If you were to take a job at Wal*Mart you would not have to do that, but Wal*Mart will be doing it for you. The same if you go to work as a music teacher at your local school system.

I sympathize with you that you live under a very complex, backwards and inefficient tax regime and that there are not free tools today made available to easily do your own taxes without paying for an accountant. However, short of moving to another country, getting a job instead of being your own boss or voting for progressive changes to the status quo, that is the reality you have to deal with. It could be worse, you could be trying to run your studio in Somalia or somewhere where your daily worries are how to get clean water and avoid being shot on the street on your way to the market.

My point was the added cost my accountant would charge me for the 1099s. I believe they charge per form.
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#1479472 - 07/22/10 09:48 PM Re: New USA tax reporting requirement [Re: theJourney]
Little_Blue_Engine Offline
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Originally Posted By: theJourney

I sympathize with you that you live under a very complex, backwards and inefficient tax regime and that there are not free tools today made available to easily do your own taxes without paying for an accountant.


I believe this is why so many are upset. We already have an extremely inefficient and overly complicated system, now the government wants to make it even more inefficient and complicated. If this passes I likely won't be directly affected because I'm not self-employed, but I can see why many are upset. Its just one more step to go through that's really not nescesary.
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#1479477 - 07/22/10 09:55 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Mark_C Offline
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Originally Posted By: John v.d.Brook
If retail coin sales have to be reported, which are not business to business, then it's possible all large consumer purchases may have to be reported. I haven't downloaded the final bill, and don't have time to dig further....

IMO that's representative of how you've approached this subject, and not a very good comment on it.

It's not hard at all to see that this thing wouldn't apply to your "washer and dryer." It didn't sound right to me, and it prompted me to look into it. It took about one minute (literally) for me to see what the story was -- i.e. to confirm that you were off base.

And really that's how you've approached this whole discussion which you started. You seem not to care enough about the details, nor about finding out one way or the other. It's not much different than shouting "FIRE" in a crowded theater, before having much idea of whether there's anything to shout about.

Some people have recognized your approach as such. Too bad not everyone did.
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#1479478 - 07/22/10 09:58 PM Re: New USA tax reporting requirement [Re: Monica K.]
Mark_C Offline
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Originally Posted By: Monica K.
Hmm... I just spent a half hour googling, and I think the new law DOES cover retail purchases, not just business to business.....

I don't think so.....
[edit: I see that you corrected this in a later post. Good job!!]

BDB gave a good reply:
Originally Posted By: BDB
Not likely! Do you think grocery stores will be required to get W9s from all of their customers in case they spend $600 a year?

......but in any event, we agree on the basic point (as you went on to say): that it only applies to business transactions, which means that John's worry over the "washer/dryer" is mistaken.

Originally Posted By: Monica K.
[Edit: I got part of this wrong and am deleting in the interest of not spreading more misinformation.]

Would that more people took the trouble to do that with their stuff too! smile

From what I can tell, there's more misinformation than information. But it looks like people are getting that.


Edited by Mark_C (07/22/10 10:13 PM)
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#1479514 - 07/22/10 10:39 PM Re: New USA tax reporting requirement [Re: Mark_C]
BDB Offline
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What I read was that the law has been passed, and it is now up to the IRS to formulate and receive comments on how it will be implemented. If the purpose is to provide a paper trail between the buyer and the seller, it would be reasonable to accept credit card statements in lieu of 1099 reporting, and that is something that we could ask the IRS to do.

In any case, it is not likely that this will be burdensome on most minuscule business like piano teachers. You will not need to give a 1099 to a private party used piano seller, as that is not a taxable transaction. You may need to give one to a dealer. If you are regularly selling piano benches or music to your students, you already have a tax headache: you should have a resale permit and a license to do so, although if you are just acting as an agent for the sale, and not taking any profit from it, there should be no such requirements.

I have always recognized that there is paperwork that goes along with running a business, and I appreciate the fact that it can be far out of proportion to the amount of money that is involved. It is especially difficult for me, when I think of all the time I have spent on it and the money that I paid from it, and now that I am making most of my money from investments, I rarely pay any income tax other than Schedule C (Social Security) on far more income than I used to make. I had been doing my mother-in-law's taxes, and it bothered me that she paid more than I did even though she had a fraction of the income. That bothers me far more than a little more paperwork.
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#1479732 - 07/23/10 09:08 AM Re: New USA tax reporting requirement [Re: Mark_C]
John v.d.Brook Online   content
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Mark, I do hope you're a bit more polite to your patients than your posting here would indicate.

I'm busy teaching and between students, I can post. Apparently, you think every one should hire a tax accountant and lawyer, investigate every possible implication of a new law, before saying anything. Or, we can post what we've heard, and let others with more time/expertise dig in and find out.

As I've said, I've notified MTNA, our professional organization here in the USA, and asked their legal consul to look into the matter and advise teachers.

Further, teachers entering the field can use this information to evaluate whether they want to continue down the path as an independent studio owner, or go another route; we do have elections coming up soon, and perhaps some studio owners may want to voice dissatisfaction with government overreach in the only way politicians seem to understand.

Wishing you a good day and weekend.
_________________________
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Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
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#1479736 - 07/23/10 09:16 AM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Morodiene Offline
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John, I appreciate you bringing this to my attention, and would like to know what MTNA has to say about it. I'm sure since it's pretty new information that like everyone else, they're trying to sort it out and perhaps waiting to see how the IRS decides to implement this.
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#1479880 - 07/23/10 12:59 PM Re: New USA tax reporting requirement [Re: Morodiene]
Jennifer Eklund Offline
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...but but but....we're "creating" jobs. More paper-pushers at the IRS....
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#1479891 - 07/23/10 01:23 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Mark_C Offline
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Originally Posted By: John v.d.Brook
Mark, I do hope you're a bit more polite to your patients than your posting here would indicate......

John, I've been far more polite to you than you have deserved.

You came on here with sloppy incorrect stuff and you've been spreading hysteria over it, plus some political aspersions. When things have been pointed out to help you correct and clarify the story, you have almost entirely rejected it, and you've just tried to take your misguided, false, and exaggerated points even further.

It's a credit to this site and its membership that they haven't let themselves be taken too far down that path with you.
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#1479895 - 07/23/10 01:28 PM Re: New USA tax reporting requirement [Re: Mark_C]
John v.d.Brook Online   content
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As far as I can determine, my original post stands as correct. It's what CNBC reported. And one doesn't define hysterical as voicing displeasure with adding additional and unnecessary reporting requirements.
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#1479900 - 07/23/10 01:31 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Mark_C Offline
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OK.
Since you're sounding reasonable smile let's see.

Are you willing to say that much of what you have said simply doesn't apply?
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#1479915 - 07/23/10 01:46 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Monica K. Offline

Platinum Supporter until Dec 31 2012


Registered: 08/10/05
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Loc: Lexington, Kentucky
I didn't view John's posts as "spreading hysteria." While I think that the practical impact of the new rules on piano teachers will be small, for other sectors (such as, egocentrically speaking, the coin business) the time/money involved in complying with the regulations will be enormous, unpleasant, and could even make some small businesses go under.

The new code permits the IRS some wiggle room in how the rules are implemented. For example, they apparently intend to exempt credit card purchases from the reporting requirements, so an easy way to avoid having to file the 1099s would be simply to pay for everything with credit cards. That will work for certain small businesses (including piano teachers, I imagine) but not others.

Another troubling aspect about this mess is that some people are predicting that the new rules will have an adverse effect on small, locally owned businesses. Because the rule requires one 1099 form per vendor, people may decide to minimize paperwork by purchasing most of their stuff from a few very large companies (amazon, Office Depot, etc.) rather than shop around and purchase from smaller, more specialized local companies.

The IRS has invited public comment on the legislation. I have no idea whether they'll read it or respond to it in any way, but those of you who feel strongly about the issue should feel free to offer input. Here's the IRS document soliciting comments:

http://www.irs.gov/pub/irs-drop/n-10-51.pdf

Scroll down to the bottom of p. 4 to find the 3 ways in which comments can be submitted.
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#1479937 - 07/23/10 02:28 PM Re: New USA tax reporting requirement [Re: Monica K.]
John v.d.Brook Online   content
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Mark,

You know, you're on a piano teacher's forum, and we musicians are notorious for having a flair for the dramatic, hyperbole and exaggeration. It's our stock in trade. After all, artists are not cold and clinical. I might ask what did you really expect?

If you're looking for the highly analytical, you might try a tax preparers forum or even, I suppose, a clinical psychologists forum (although I can see how they might get into some heated discussions).

At this point, all I know for certain is that many of us teachers are now going to have to prepare form 1099s which we didn't have to prepare before. If Monika is correct, and I sincerely hope she is, and our credit card purchases will be exempt, then Amen. However, that's a separate issue - and a scary one at that, that the US Government is watching our credit cards. We can leave that topic to the Freedom forums.

I do know that many of the piano teachers in our community are north of 65 and are not computer literate. Whether they still do their taxes themselves or pay to have a tax preparer do it, I don't know, but either way, this will be an added burden.
_________________________
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Full-time Private Piano Teacher offering Piano Lessons in Olympia, WA. www.mypianoteacher.com
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#1479943 - 07/23/10 02:48 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Lollipop Offline
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Registered: 07/28/09
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Loc: Georgia
Discussion and feedback mean a lot more now than they will when it's a done deal and there's nothing we can say or do to change it. I'm grateful to John for bringing up the topic, and for others - on all sides of the issue - for the discussion, insight, and opinions. I don't see any hysteria - just folks who see various concerns.

Many musicians are not just teachers; they are self-employed as performers as well. So there will be ramifications outside the studio, too.
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#1479949 - 07/23/10 03:00 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
Mark_C Offline
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Registered: 11/11/09
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Loc: New York
Originally Posted By: John v.d.Brook
You know, you're on a piano teacher's forum, and we musicians are notorious for having a flair for the dramatic, hyperbole and exaggeration. It's our stock in trade. After all, artists are not cold and clinical. I might ask what did you really expect?....

Expect? Nothing. smile I never expect anything anywhere.

Hope? What I would have hoped for was the kind of discussion we're having now (it has gotten way better as we're gone along) -- measured, and with a care for accuracy, a care for not throwing fuel on the fire, and an openness to taking things back, if someone realizes that what they said was wrong.

BTW.....I ought to say that despite my criticisms, I also much appreciate your having brought this up.
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#1479953 - 07/23/10 03:07 PM Re: New USA tax reporting requirement [Re: John v.d.Brook]
theJourney Offline
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Registered: 02/22/07
Posts: 3946
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Originally Posted By: John v.d.Brook
Further, teachers entering the field can use this information to evaluate whether they want to continue down the path as an independent studio owner, or go another route; we do have elections coming up soon, and perhaps some studio owners may want to voice dissatisfaction with government overreach in the only way politicians seem to understand.


Yeah, I am sure that for most teachers whether or not they have to spend an extra two hours per year on their bookkeeping will determine if they would rather be a piano teacher or a cashier at Wal*Mart.

At least you are now being honest about your true intentions with this thread: to make political propaganda based on your own emotional distortions to try to fit this story to your own ideological biases rather than to have a reasoned discussion of the likely minor impact of this proposed requirement on piano teachers.

As long as people continue to vote uninformed and emotionally in the US based on television propaganda, bias and slogans rather than based on informed positions, education, and rational and critical thought -- often voting directly against their own interests and those of their community after being bamboozled by distortions and falsehoods -- then Americans will continue to have less and less self determination, get more incompetent government and wind up with the kind of society developing over the past 30 years where the rich get richer, the poor get poorer and ever more ignorant, the middle class continues to disappear and culture, music education and piano teachers slowly become completely extinct.

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#1479956 - 07/23/10 03:09 PM Re: New USA tax reporting requirement [Re: theJourney]
Mark_C Offline
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Registered: 11/11/09
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Loc: New York
Originally Posted By: theJourney
....At least you are now being honest about your true intentions with this thread: to make political propaganda based on your own emotional distortions to try to fit this story to your own ideological biases rather than to have a reasoned discussion of the likely minor impact of this proposed requirement on piano teachers....

I wouldn't have put it quite so strongly, but indeed the quasi-political aspect of the OP (and a couple of the follow-ups) was the thing that made me first suspect that something here was awry and which made me look into the details.

The erroneous and exaggerated ways of looking at the requirement, and the seemingly stubborn and resistant follow-up, seemed very reminiscent of some of the discussion (back in the day) of the Equal Rights Amendment -- "unisex bathrooms" and whatnot -- as well as much that we hear currently from Tea Partiers. Does that mean it's where he's coming from? I don't particularly think so, although I agree it's remarkable that now he talks about the elections rather than perhaps spending that space on correcting the errors in what he has said. (If I were him, I'd also feel compelled to apologize for them, but never mind.) smile

I'm happy just to have the discussion of this subject be what it has become. It has gotten good.
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#1480016 - 07/23/10 04:41 PM Re: New USA tax reporting requirement [Re: theJourney]
jotur Offline
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Registered: 09/16/06
Posts: 5658
Loc: Santa Fe, NM
Originally Posted By: theJourney
As long as people continue to vote uninformed and emotionally in the US based on television propaganda, bias and slogans rather than based on informed positions, education, and rational and critical thought -- often voting directly against their own interests and those of their community after being bamboozled by distortions and falsehoods -- then Americans will continue to have less and less self determination, get more incompetent government and wind up with the kind of society developing over the past 30 years where the rich get richer, the poor get poorer and ever more ignorant, the middle class continues to disappear and culture, music education and piano teachers slowly become completely extinct.


laugh laugh laugh Us Americans here in the US are *such* doofusses laugh And apparently not adults, either - at least not the ones who might find drawbacks to this, according to you!

I think I should move <snort>

Cathy
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#1480026 - 07/23/10 04:52 PM Re: New USA tax reporting requirement [Re: jotur]
theJourney Offline
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Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: jotur

laugh laugh laugh Us Americans here in the US are *such* doofusses laugh And apparently not adults, either - at least not the ones who might find drawbacks to this, according to you!

I think I should move <snort>

Cathy


Well, I certainly wouldn't agree with your blanket black/white statement.

But I would say that your post doesn't come across as being very thoughtful, serious or mature.

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#1480034 - 07/23/10 05:03 PM Re: New USA tax reporting requirement [Re: theJourney]
eweiss Offline
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Registered: 02/28/09
Posts: 2393
Loc: Beautiful San Diego, CA
Originally Posted By: theJourney
As long as people continue to vote uninformed and emotionally in the US based on television propaganda, bias and slogans rather than based on informed positions, education, and rational and critical thought --

I thought that was the only way to vote. smile
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#1480044 - 07/23/10 05:14 PM Re: New USA tax reporting requirement [Re: theJourney]
apple* Offline


Registered: 01/01/03
Posts: 19862
Loc: Kansas
it is clear to me that music and politics do not match.
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#1480048 - 07/23/10 05:18 PM Re: New USA tax reporting requirement [Re: theJourney]
jotur Offline
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Registered: 09/16/06
Posts: 5658
Loc: Santa Fe, NM
Originally Posted By: theJourney
Originally Posted By: jotur

laugh laugh laugh Us Americans here in the US are *such* doofusses laugh And apparently not adults, either - at least not the ones who might find drawbacks to this, according to you!

I think I should move <snort>

Cathy


Well, I certainly wouldn't agree with your blanket black/white statement.

But I would say that your post doesn't come across as being very thoughtful, serious or mature.



Hm. Guess I needed the "sarcasm on/off" icons as well.

If you don't agree with the blanket statements perhaps it would be better if you didn't make them that way in your posts. If you, for instance, said "some people aren't adults", or "some Americans vote ignorantly". MHO, of course smile

I often like your posts. But the ones here seem, uh, smug, to me - and overly generalized smile

I'm sure you don't see them that way. That's life smile

Cathy


Edited by jotur (07/23/10 05:19 PM)
Edit Reason: spelling
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#1480071 - 07/23/10 05:49 PM Re: New USA tax reporting requirement [Re: jotur]
Elissa Milne Offline
1000 Post Club Member

Registered: 01/11/10
Posts: 1337
Loc: Sydney, NSW, Australia
I reckon TheJourney is expressing a fairly mainstream view when looked at from a global perspective.

A discursive thread essential to US politics is the idea that *anyone* can (and almost certainly will) get rich in the United States of America, and, because this notion is so widely subscribed to *against all evidence*, people with no hope of spectacular financial advancement find themselves voting to reduce taxes for the super-rich while reducing services for themselves.

This is, at least, how it appears to really anyone observing US politics from the outside, and of course, I'm sure many from the inside as well.

In addition, the federal structure of the government allows for complicated taxation systems, different from one state to the next, making conducting business much more difficult than in a nation with a national taxation system. Here in Australia we suffer a little from this duplication in government, but to nowhere near the same degree as in the US.

Surely, however (getting back to the topic), no one can really know what they are worried about until the IRS announces how the legislation will be implemented? And if Australian experience is anything to go by, if a reporting requirement is onerous to the point of convincing people to shut down their businesses, politicians *will* change it.
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#1480105 - 07/23/10 06:53 PM Re: New USA tax reporting requirement [Re: Elissa Milne]
Barb860 Offline
1000 Post Club Member

Registered: 04/11/09
Posts: 1646
Loc: northern California
Originally Posted By: Elissa Milne
I reckon TheJourney is expressing a fairly mainstream view when looked at from a global perspective.

A discursive thread essential to US politics is the idea that *anyone* can (and almost certainly will) get rich in the United States of America, and, because this notion is so widely subscribed to *against all evidence*, people with no hope of spectacular financial advancement find themselves voting to reduce taxes for the super-rich while reducing services for themselves.

This is, at least, how it appears to really anyone observing US politics from the outside, and of course, I'm sure many from the inside as well.

In addition, the federal structure of the government allows for complicated taxation systems, different from one state to the next, making conducting business much more difficult than in a nation with a national taxation system. Here in Australia we suffer a little from this duplication in government, but to nowhere near the same degree as in the US.

Surely, however (getting back to the topic), no one can really know what they are worried about until the IRS announces how the legislation will be implemented? And if Australian experience is anything to go by, if a reporting requirement is onerous to the point of convincing people to shut down their businesses, politicians *will* change it.


Really? Maybe I should move to Australia.

(no sarcasm or kidding!)


Edited by Barb860 (07/23/10 06:56 PM)
Edit Reason: clarification
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#1480107 - 07/23/10 06:57 PM Re: New USA tax reporting requirement [Re: Elissa Milne]
Mark_C Offline
Yikes! 10000 Post Club Member

Registered: 11/11/09
Posts: 19871
Loc: New York
Originally Posted By: Elissa Milne
.....if Australian experience is anything to go by, if a reporting requirement is onerous to the point of convincing people to shut down their businesses, politicians *will* change it.

Yes (usually). smile

Sometimes if not often, things get passed in a legislative bill without enough thought, and with unintended implications. Those things almost invariably get fixed.

A famous recent example was that in the health reform bill (probably the exact same one that John is talking about), if I understand right, the Senate unknowingly terminated its own health insurance.

I don't know how or if that has been fixed yet, but obviously it will be.

Back to the subject at hand: Not only don't we know how the IRS will implement it, but as seen from some of the posts, there's a lot of misunderstanding even just regarding simple aspects of what the regulation says. We're getting it cleared up as we go along (I think) smile .....and that's good.
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#1480109 - 07/23/10 06:59 PM Re: New USA tax reporting requirement [Re: Mark_C]
Barb860 Offline
1000 Post Club Member

Registered: 04/11/09
Posts: 1646
Loc: northern California
Originally Posted By: Mark_C
Originally Posted By: Elissa Milne
.....if Australian experience is anything to go by, if a reporting requirement is onerous to the point of convincing people to shut down their businesses, politicians *will* change it.

Yes (usually). smile

Sometimes if not often, things get passed in a legislative bill without enough thought, and with unintended implications. Those things almost invariably get fixed.

A famous recent example was that in the health reform bill (probably the exact same one that John is talking about), if I understand right, the Senate unknowingly terminated its own health insurance.

I don't know how or if that has been fixed yet, but obviously it will be.


Yes, of course, obviously this would be fixed.
Now fixing things that will help small businesses and not the government? Not sure on that one...
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#1480111 - 07/23/10 07:01 PM Re: New USA tax reporting requirement [Re: Barb860]
Mark_C Offline
Yikes! 10000 Post Club Member

Registered: 11/11/09
Posts: 19871
Loc: New York
Originally Posted By: Barb860
.....Now fixing things that will help small businesses and not the government? Not sure on that one...

You're quite right.
Congress won't necessarily be as motivated to fix things for people other than themselves. ha

But presumably motivated enough.

Assuming the "if" that you said up there: "....if a reporting requirement is onerous to the point of convincing people to shut down their businesses" (and I would add, or anything close to that).
And it's far from clear that this is so.
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#1480198 - 07/23/10 10:14 PM Re: New USA tax reporting requirement [Re: Elissa Milne]
jotur Offline
5000 Post Club Member

Registered: 09/16/06
Posts: 5658
Loc: Santa Fe, NM
Originally Posted By: Elissa Milne


A discursive thread essential to US politics is the idea that *anyone* can (and almost certainly will) get rich in the United States of America, and, because this notion is so widely subscribed to *against all evidence*, people with no hope of spectacular financial advancement find themselves voting to reduce taxes for the super-rich while reducing services for themselves.

This is, at least, how it appears to really anyone observing US politics from the outside, and of course, I'm sure many from the inside as well.


Well, I'm glad you added the disclaimer, because if "anyone can get rich" is an "idea" that's "essential" to US politics it's news to me smile It sounds like maybe that "idea" is perhaps an overdramatization of "self-reliance", or "pulling oneself up by one's bootstraps" or "land of opportunity" or even "all men are created equal" - I dunno. I'm sure there are people who believe so. And many who don't. I suspect the idea that a great many people vote for those who would reduce taxes for the super-rich while reducing services for themselves is - over-simplified. I suspect it's much more nuanced than that. But hey, that's just me. I come from a not-rich family in Oklahoma - where boom and bust alternated all the time. And it was fairly obvious that those who were roughnecks on the oil rigs weren't likely to get rich smile But we were pretty conservative in our views of how much government was needed laugh

Originally Posted By: Elissa Milne
In addition, the federal structure of the government allows for complicated taxation systems, different from one state to the next, making conducting business much more difficult than in a nation with a national taxation system.


I guess overall I don't really know how much more or less difficult it is to conduct business in the US than some other country, so I'll pass up commenting on it. But there's certainly strong historical reasons for the pull between federal and local governments, from the very beginning. Whether the U.S. was simply a federation of independent states or a stronger union was a *huge* issue among the states as they hassled over what government organization they needed. It was a huge part of the issues that led to the Civil War/The War Between the States (depending on your point of view), which wasn't fought *only* about slavery or the expansion of it. States rights are still a live issue here, and that balance is being worked out continually in U.S. politics. And taxation is part of it. There was some discussion in the beginning even about import/export taxes between the states. There were issues of large states vs small states in representation in whatever government there was, and western states vs eastern states, and some of those issues are still quite live.

In my opinion, there is *no* ideal form of government, if for no other reason than that people won't agree on what "ideal" is laugh There are always trade-offs. I'm not familiar enough with Australia to comment, but I'd be willing to bet there's trade-offs there, too. *Everyone* trades off, and different individuals are willing to make different trades, including on tax issues laugh

There are legitimate concerns and values from many different perspectives. I may not see everything the way John, or rocket88, does, but the fact that each of us has a different viewpoint does *not*, as far as I can tell, mean that any one of us puts *only* *our* interests first. We have different views of what we want for our communities, and what makes them communities in which we want to live.

And those different views don't make us not adults, either laugh

That's the way I see it, any way.

And just to be clear, rocket really plays them blues smile

Cathy


Edited by jotur (07/23/10 10:15 PM)
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#1480298 - 07/24/10 01:21 AM Re: New USA tax reporting requirement [Re: jotur]
theJourney Offline
3000 Post Club Member

Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: jotur
Hm. Guess I needed the "sarcasm on/off" icons as well.

If you don't agree with the blanket statements perhaps it would be better if you didn't make them that way in your posts. If you, for instance, said "some people aren't adults", or "some Americans vote ignorantly". MHO, of course smile

I often like your posts. But the ones here seem, uh, smug, to me - and overly generalized smile

I'm sure you don't see them that way. That's life smile

Cathy


You are right. A number of my formulations was insufficiently nuanced. I was also trying to be kind in my response to John by saying "people" rather than "you" which might be considered as a personal attack. In another post I formulated more correctly with constructions such as "to the extent that American people..." and "as long as people <engage in the specific mentioned behavior>".

However, in a democracy, what matters is often what a majority of citizens do.

The fact of the matter is, if I wanted to make the most accurate generalization of the voting behavior of Americans than that would have been more like this:

Perversely, a majority of Americans does not even bother to exercise their democratic right and privilege to vote in all the elections in which they have the opportunity to vote, making voter turnout and democratic participation one of the lowest in the developed, democratic Western world. frown

http://www.idea.int/vt/survey/voter_turnout_pop2-2.cfm

One reason for this can be the fact that, effectively, Americans are only allowed to meaningfully vote for one additional huge nebulous party than was allowed in the one-party Soviet communist system. National elections are organized around mass-marketing a personality cult of the "winner takes all" Presidential candidate rather than credible, differentiated political platforms to which government is held accountable for achieving. Voters can feel disconnected when they feel their vote doesn't matter (such as many local elections where only one candidate may be running for a position or in national elections when the popular vote is ignored to have the government appointed to the loser and a member of a wealthy, elite political dynasty by the supreme court or where no matter whom they vote for government appears to be only working for the companies that bought their Congressmen fair and square not the voter or that it appears that promises are impossible to keep or nothing really changes).


Edited by theJourney (07/24/10 01:33 AM)

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#1480346 - 07/24/10 03:41 AM Re: New USA tax reporting requirement [Re: theJourney]
Elissa Milne Offline
1000 Post Club Member

Registered: 01/11/10
Posts: 1337
Loc: Sydney, NSW, Australia
jotur, the other qualification I should have added to the bit from me that you quoted: "in comparison to other countries".

Like many citizens of the world who aren't citizens of the US, I appreciate the historical events that have led to the US being the nation it is today - it is a fascinating history.

I'm typing explanatory text and find myself deleting it because I keep making jokes about Glen Beck. Argh.

Anyways, seriously, (and I'm now addressing anyone concerned about taxation) if businesses are going to be saddled with an reporting requirement and attendant accounting expense (time/money) that renders the business unviable you can bet your bottom dollar government (even in the home of anti-capitalist-sentiment US! haha!) will change the reporting requirement.

Of course, if you believe that government exists to exterminate business then you will not share my point of view.
_________________________
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Working with Hal Leonard, Alfred, Faber, and Australian Music Examination Board
Music in syllabuses by ABRSM, AMEB, Trinity Guildhall, ANZCA, NZMEB, and more
www.elissamilne.wordpress.com

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#1485184 - 07/31/10 12:01 PM Re: New USA tax reporting requirement [Re: Elissa Milne]
rocket88 Offline
3000 Post Club Member

Registered: 09/04/06
Posts: 3187
Here is a link to what's happening with this new law:

http://roadrunner.com/news/topic/article..._to_fix_new_law
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#1485200 - 07/31/10 12:18 PM Re: New USA tax reporting requirement [Re: rocket88]
theJourney Offline
3000 Post Club Member

Registered: 02/22/07
Posts: 3946
Loc: Banned
And, in closely related news, here's what's happening with the efforts to block any hard needed support to America's endangered small businesses while the big businesses who tanked the economy got away with a no-strings attached, hundreds of million dollar heist of the Treasury to keep paying themselves millions in bonuses while unemployment in the US is as high as 35% locally.

http://www.nytimes.com/2010/07/30/us/politics/30cong.html

Amazing the ability of US Congressmen to speak out of both sides of their mouth for political advantage.

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#1485205 - 07/31/10 12:24 PM Re: New USA tax reporting requirement [Re: theJourney]
rocket88 Offline
3000 Post Club Member

Registered: 09/04/06
Posts: 3187
Originally Posted By: theJourney


Amazing the ability of US Congressmen to speak out of both sides of their mouth for political advantage.


What's amazing is that according to many posts on these forums, sleazy politicians only appear to live in the United States of America.

Politicians in all the other countries on the planet, on the other hand, are apparently as pure as the wind driven snow, because we never see posts blaming other countries for anything here on the Piano forums. But we see lots of anti-American statements.
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#1485258 - 07/31/10 02:02 PM Re: New USA tax reporting requirement [Re: rocket88]
theJourney Offline
3000 Post Club Member

Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: rocket88
Originally Posted By: theJourney


Amazing the ability of US Congressmen to speak out of both sides of their mouth for political advantage.


What's amazing is that according to many posts on these forums, sleazy politicians only appear to live in the United States of America.

Politicians in all the other countries on the planet, on the other hand, are apparently as pure as the wind driven snow.


That would seem to be simply your biased assumption. Unless you can actually point to posts indicating that "Politicians in all the other countries on the planet, on the other hand, are apparently as pure as the wind driven snow."

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#1485314 - 07/31/10 04:09 PM Re: New USA tax reporting requirement [Re: theJourney]
rocket88 Offline
3000 Post Club Member

Registered: 09/04/06
Posts: 3187
That is not a "biased assumption", but rather is an observation of a dichotomy.

You are right...there is a virtual complete lack of posts accusing politicians from countries other than the United States of sleaziness, malfeasance, idiocy, "not being an adult", etc, etc.

However, accompanying that lack is a continuous onslaught of anti-American statements, including statements against American politicians, most of which emanate from a tiny handful of posters. Those poster(s) use even the slightest and most oblique opening in a discussion about pianos and music to bash America, its Presidents, its laws, etc, etc.

I could post more than a few of those from just the past few months, Journey. Some of which you might find familiar.

But I will not, because this is a piano forum, and already I have contributed to breaking the forum rules by getting into politics.

But it is a rule I am willing to break, upon occasion, in defense of my country on threads where others have already broken the rule.
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#1485369 - 07/31/10 05:29 PM Re: New USA tax reporting requirement [Re: rocket88]
Piano*Dad Offline
Yikes! 10000 Post Club Member

Registered: 04/12/05
Posts: 10422
Loc: Williamsburg, VA
Look, this is getting annoying.

Rocket: your post #3 in this thread set the stage. The politics was not initiated by TJ.

TJ: you do seem to take many opportunities to add little bits of snark about American politics. Subtle digs, perhaps, but they add up to an attitude.

For instance (and it's just one):

Quote:
As long as people continue to vote uninformed and emotionally in the US based on television propaganda, bias and slogans rather than based on informed positions, education, and rational and critical thought --


.. as though Europeans are automatically more thoughtful people. Amazing how many I've met who honestly think "the Jews" control the world's media.

European politics is no less a cesspool than American politics.
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#1485371 - 07/31/10 05:40 PM Re: New USA tax reporting requirement [Re: theJourney]
eweiss Offline
2000 Post Club Member

Registered: 02/28/09
Posts: 2393
Loc: Beautiful San Diego, CA
Originally Posted By: theJourney
The fact of the matter is, if I wanted to make the most accurate generalization of the voting behavior of Americans than that would have been more like this:

Perversely, a majority of Americans does not even bother to exercise their democratic right and privilege to vote in all the elections in which they have the opportunity to vote, making voter turnout and democratic participation one of the lowest in the developed, democratic Western world. frown


Nigel Powers says...



"There are two things I can't stand in this world - intolerance
of other people's cultures, and the Dutch."
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#1485385 - 07/31/10 05:59 PM Re: New USA tax reporting requirement [Re: rocket88]
keystring Offline
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Registered: 12/11/07
Posts: 11844
Loc: Canada
There is a bit of a problem here. The members in this forum come from every country in the world. The topic under the discussion involves a local matter of one particular country. So how can it be discussed by anyone who is not an American? And if it is discussed by anyone else, how can they not help but reflect from he perspective of their own countries?

I, for one, was interested in the fact that John mentioned this reporting requirement, and the health care reforms, in one and the same thread. He never made a link between the two things which seem quite separate. For the latter, those of us who are assured health care and don't have to worry about a rapid plunge into poverty should we become seriously ill, are probably hoping that whatever is going on will help alleviate the situation down there.

You are inviting an international forum to look at your local situation. How can we not look at it from the perspective of our own countries? Is this extra reporting going to help with the health situation? Is it related to the health situation? (I'm still on page one, wondering why it was mentioned).

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#1485399 - 07/31/10 06:22 PM Re: New USA tax reporting requirement [Re: Piano*Dad]
Kreisler Offline


Registered: 11/27/02
Posts: 13817
Loc: Iowa City, IA
Originally Posted By: Piano*Dad
European politics is no less a cesspool than American politics.


And this guys knows, folks. He studies the world's cesspools for a living! (Piano*Dad has some serious street cred in this area. Wowzers!)
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#1485402 - 07/31/10 06:25 PM Re: New USA tax reporting requirement [Re: keystring]
rocket88 Offline
3000 Post Club Member

Registered: 09/04/06
Posts: 3187
Originally Posted By: keystring
I, for one, was interested in the fact that John mentioned this reporting requirement, and the health care reforms, in one and the same thread. He never made a link between the two things which seem quite separate.


From what I understand, this reporting requirement we are discussing is buried inside the massive new health care bill. I could be misinformed about that.
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#1485491 - 07/31/10 08:42 PM Re: New USA tax reporting requirement [Re: Kreisler]
Piano*Dad Offline
Yikes! 10000 Post Club Member

Registered: 04/12/05
Posts: 10422
Loc: Williamsburg, VA
Originally Posted By: Kreisler
Originally Posted By: Piano*Dad
European politics is no less a cesspool than American politics.


And this guys knows, folks. He studies the world's cesspools for a living! (Piano*Dad has some serious street cred in this area. Wowzers!)


Nah, I'm just being a bit dramatic. Not to mention a touch high and mighty. whome
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#1485666 - 08/01/10 04:28 AM Re: New USA tax reporting requirement [Re: keystring]
theJourney Offline
3000 Post Club Member

Registered: 02/22/07
Posts: 3946
Loc: Banned
Originally Posted By: keystring
There is a bit of a problem here. The members in this forum come from every country in the world. The topic under the discussion involves a local matter of one particular country. So how can it be discussed by anyone who is not an American? And if it is discussed by anyone else, how can they not help but reflect from he perspective of their own countries?

I, for one, was interested in the fact that John mentioned this reporting requirement, and the health care reforms, in one and the same thread. He never made a link between the two things which seem quite separate. For the latter, those of us who are assured health care and don't have to worry about a rapid plunge into poverty should we become seriously ill, are probably hoping that whatever is going on will help alleviate the situation down there.

You are inviting an international forum to look at your local situation. How can we not look at it from the perspective of our own countries? Is this extra reporting going to help with the health situation? Is it related to the health situation? (I'm still on page one, wondering why it was mentioned).


Exactly. And, some of us have the added perspective of having more than one nationality and/or having lived and worked in many countries around the world, including the US.

It is hard to explain how music sounds to someone who is deaf. It is hard to compare situation A with situation B if someone is only familiar with situation A, or only believes that their situation A or their status quo is the only one possible. Or who believes that comparisons to situations in other countries are attacks. Or is shocked and insulted to hear that despite what they were told ad nauseum in seventh grade civics class or what is implicitly told during hours of television advertising each evening, that their situation isn't the best in the world, and on many issues, including the tax system and the health care system is actually one of the worst in the developed, Western world.

In much of Western Europe small businesses including piano teachers already have to account for every single business related purchase and are motivated to do so, since they receive up to 19% of the purchase price back on their taxes. Likewise they are responsible for accounting for every invoice such as an hour lesson and charging and collecting the appropriate VAT tax rate on these invoices. It is ubiquitous, easy, universal and not seen or experienced as a burden. The VAT taxes collected are netted against those paid and only the difference is submitted.

At the same time, using the Netherlands as an example, everyone is on mandatory, no qualification criteria, high quality, competitive private health insurance that covers everything, including 100% of drug costs, no co pays for visits or procedures, only a $150/year deductible and a maximum basic policy cost of around $1500/year with supplemental policies available that cover more such as alternative medicine (and free for all children up to 18 years including dental and eyeglasses). Those whose income is too low, have their insurance policy costs subsidized on their tax return. Never worries about costs, no trouble finding a physician (general practitioners are spread evenly throughout neighborhoods all over the country have a walk in hour every day and make house calls), no HMO saying no, no 'in-network, out-of-network' games, no surprise bills, no medical bankruptcies, no choosing whether to eat, pay the rent or have one's medicine, no staying with a bad job instead of becoming an entrepreneur just to keep a company insurance plan. Just freedom and high quality, accessible, no wait health care at an affordable cost. And, all this is done at about half the cost per capita as what is spent in the US, with comparable and often better health outcomes including longer life expectancy.

So, if a small country without the buying power and riches as the US can make things so high quality, inexpensive, fair, easy and efficient, the question is why is that not possible in the US?

Part of the answer is to be found in the fact that those who benefit the most from the status quo (such as monopolistic health insurance companies with little to no local competition and pharma companies with carte blanche to overcharge on drugs) have much more leverage on the political process than an average citizen (who on average also does not vote).

To make matters worse, as we have seen on this thread, those who would most benefit from a change from the status quo are often the most vocal opponents, finding themselves hoodwinked by deceptive propaganda paid for by big business they fight against their own interest, that of their profession and their local community.

This ultimately leads to an unfair situation with gross inequalities and with wild discontinuities such as the recent Great Recession.

http://www.thenation.com/article/36893/unjust-spoils?


Edited by theJourney (08/01/10 04:52 AM)

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#1486122 - 08/01/10 07:21 PM Re: New USA tax reporting requirement [Re: theJourney]
Ken Knapp Offline



Registered: 04/18/06
Posts: 2278
Loc: Pennsylvania
This topic was originally started to discuss the new tax requirements and how they will impact the American teachers. Since then, it has widely wandered and gotten into areas away from the original topic. I think the discussion has run its course.

Ken
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