Starting in 2012, all business payments or purchases that exceed $600 in a calendar year will need to be accompanied by a 1099 filing. That mean all. Not just contract labor or sole proprietor vendors. It means restaurants, car rental companies, conference centers. It means obtaining the taxpayer ID number of the individual or corporation you’re making the payment to — even if it’s a giant distributors like CDW or Newegg — at the time of the transaction, or else facing IRS penalties. In essence, the 1099-Misc is having its role changed from a form for tracking off-payroll employment to one that must accompany virtually any sizeable business transaction.
The 1099 changes were attached to the health care reform bill. They change the requirements for filing the “1099-Misc” form. Until now, payments to corporations have been exempt from 1099 rules, as have payments for the purchase of goods. Eliminating the 1099 exceptions for corporations and goods was seen as an easy way to bring in more cash without raising tax rates.
Our politicians at work! Next year, we need to take a close look at how 1099’s are prepared.
I am not a lawyer. I don’t pretend to be a lawyer. And therefore I take no responsibility for the legal validity of this blog entry. If you need a legal and absolute opinion, please consult with an attorney. That said, the question has come up, can original paper documents be shredded if they were optically scanned and saved as document images during the normal course of doing business. The answer is probably, or better yet, maybe. Actually it depends. What state do you live in? How were the documents stored? When was the image taken? How was the image archived?
Is that clear? No? I understand. Let me clarify. Document images have been accepted in courts for many years. For example, microfilm has been accepted in courts as a substitute for the original document certainly since the 1950’s. Laws exist in nearly all 50 states covering the use of electronic, optical or magnetic media as a substitute for original documents. The basic question generally comes down to, are they accurate, reliable, and trustworthy. Well, are they?
So here are some of things you should consider BEFORE you shred your originals. Your documents should be regularly and consistently scanned as a normal course of day-to-day operations. The document images are verified prior to destruction of originals – that is, they are viewed on screen as they are scanned to verify the image exists. They have been stored on media which is read-only. This adds to the trustworthiness of a document image. Images stored on magnetic media, like disk drives can be modified and overwritten with ease. Document images archived on read-only optical disks are very difficult to modify and then re-save in place.
The final answer is check your local state laws and check with your attorney. Then give us a call for a solution.
Think twice before you turn in your copier for a new one. Did you know that many copiers, especially the ones that can connect to your network, contain hard drives and copies of the documents are stored on that hard disk? When you turn in your copier, it generally get’s refurbished and sold to another user or even another country. Frequently, the data on the disk is not removed creating a security breach for those in your organization and your contact sphere. Watch this video and see if you don’t consider a new policy for discarding your old copier.
This week at a regional BNI networking event held in Natick, MA, I had an opportunity to meet Dr. Ivan Misner, CEO and Founder of BNI, the world’s largest networking organization (http://www.bni.com/). As many of you know, I am the President of one of the 5,600 worldwide BNI Chapters, BNI Nashoba (http://www.bninashoba.com/). Dr. Misner spoke about many things including the weekend he spent on Sir Richard Branson’s Necker Island in the Caribbean and the “butterfly networking principle” which was the circle of events that caused him to be there. Very interesting the cards life deals out when you are open to receiving them. One thing that really rang a chord was his statement that success is the uncommon application of common knowledge. He wrote about it in his book The 29% Solution. Just think about these simple words and what they mean in your business. You need to think long and hard to see if there is some way to apply this principle when you can’t see the forest for the trees. Our businesses are built on some pretty basic concepts but it’s very difficult to think outside the box and come up with a new angle, a new approach. Take a half-hour and consider what you do and how you do it — as if you were your customer. Become an empath. What can you come up with. I’d be interested to hear.
Maps are fun, informative and sometimes great for making a point. Add data to maps and you have information squared. Here is a map of Eastern Massachusetts and surrounding areas broken out into 3-digit zip code areas.
The map details where we have spent our time over the last 10 years. Other areas of the country have been omitted, but this gives you an idea of where our clients are based. The very bright red areas represent more than 20,000 man-hours, the bright pink is 1,000+ man-hours and the light pink less than 1,000.
It’s interesting to see a long history of data painted onto a map and even more interesting if you look at the maps from year to year.
Think about your data and how you might evaluate your business on a map of the State, region or Country.
Creating this map took less than 10 minutes. Creating the data for this map took more than 10 years. Maps can be helpful looking at a decade, year, month or even a day worth of data.
A word about zip codes, zip codes make mapping easy. If you are not capturing zip codes in your business, think again.
Do you conduct business with consumers or companies beyond our borders? Are you interested in reaching out to foreign lands. You might consider attending Leveraging Your Website To Increase International Sales, More than a half-dozen speakers will team up to present this 2-day seminar on today’s business environment. Scheduled for June 9 and 10 at the Hotel Marlowe in Cambridge.
A few weeks back when I was in an office of a client, I found an IBM Selectric typewriter on someone’s desk. When I inquired what they used that for, I was told they used it for Bill of Ladings . I was aghast. People actually use these things to produce documents? Apparently they do. So I headed back to the office and dug out my Bill of Lading PDF and posted it on my web site. There it shall remain for all to use. Please, I beg you, let’s ban the typewriter from day-to-day production use. They are for young children to play with and eventually break.