Small Business Paperwork Savings Act

This bill raises the threshold for businesses to report payments to independent contractors and vendors from $600 to $5,000 annually. It directly affects small businesses and self-employed individuals who receive payments below the new $5,000 level, reducing their reporting burden. The bill also adds an inflation adjustment mechanism to keep the threshold updated annually, rounding increases to the nearest $100. These changes apply to payments made after December 31, 2023, under tax code sections governing Form 1099 reporting and backup withholding.