Focus

Often with legislation, provisions are added to a bill that have little to do with the bill itself. For example, the recently passed health care legislation contains a significant revision to the tax code that will affect you.

Section 9006 of the health care legislation states that as of Jan. 1, 2012, all businesses will need to issue 1099 forms to individuals or corporations from whom they procure more than $600 of goods or services.

So not only will you need to send 1099 forms to any independent contractors you hire, you will need to send forms to any supplier that provides you with more than $600 of roofing materials, for example.

The provision changes the current tax law in two ways: It now requires companies to track payments for tangible goods as well as services, and 1099 forms now must be sent to corporations as well as individuals.

Opponents of the provision say it will place undue hardship on small businesses and will require sending millions of additional forms. Rep. Dan Lungren (R-Calif.) has introduced legislation to repeal the new requirements.

But the provision's proponents say the government loses more than $300 billion annually in unreported tax revenue. The provision not only will decrease the gap but will help offset the costs associated with the health care bill.

Marianne Couch, a principal with Cokala Tax Group, Ann Arbor, Mich., tells CNNMoney.com she sees pros and cons in the provision. She says a big hurdle for businesses will be gathering the names and taxpayer identification numbers for every payee and vendor. However, she also says it will make it easier for businesses to determine when a 1099 is necessary: If a purchase is more than $600, a 1099 is needed.

The Internal Revenue Service is scheduled to issue more information about the new law sometime next year. Professional Roofing will continue to provide updates about the issue.

Ambika Puniani Bailey is editor of Professional Roofing and NRCA's senior director of communications.