Obamacare's Stealth Assault on Small Business

An obscure provision which sneaked through the Obama healthcare bill will place a serious new burden on small business owners.

My latest column for The Week looks at an obscure provision in the Obama healthcare bill which will place a serious new burden on small business owners.

Small business owners face a world of troubles these days: a weak economy, impending healthcare mandates, the prospect of higher taxes.

But one concern you hear about more and more is a huge new expansion in their IRS reporting requirements — a paperwork nightmare that will commence in 2012.

I got an earful on the subject after a recent speech to a group of employers in a small vacation town. They owned shops, a garage, restaurants. They did all their own bookkeeping at nights and on weekends. They did not enjoy it, but they were used to it. But now, they feared their lives were about to be consumed by a new bureaucracy.

They have reason to be afraid. Right now, business owners file two forms when they employ people: a W-2 for employees and a 1099 for freelance contractors. A typical small business files 10 such forms, at a cost of 3-5 hours of time per year.

Embedded in the new healthcare law, however, is a staggering requirement: using a new form — the 1099k — small businesses will have to start reporting all their purchases of goods from other businesses. (You can see a draft version of the 1099K form on the IRS website.)

Did you rent a car or stay in a hotel? 1099K.

Buy ink and paper from Staples? 1099K.

Lease space in a local mall? 1099K.

Collect revenue from PayPal, eBay or Amazon merchants? 1099K.

And don’t forget to collect each company’s taxpayer ID number while you are at it!

Click here to read more.