The Great 1099 Roundup begins in 2011 for real estate owners
Recent legislation has added a new burden to the owners of rental real estate. Starting in 2011, if you write checks totaling $600 or more per year to an individual, partnership or corporation, you must issue a tax Forms 1099MISC. Examples of eligible paid expenses that fall under this guideline: salaries, wages, insurance premiums, plumbing, carpentry, electrician, lawn and snow removal, accountant, lawyer, etc. As a landlord, essentially any payment you make that is not to the mortgage company requires filing Forms 1099.
We suggest collecting either social security numbers or federal identification numbers from ALL the individuals or companies that supply goods and services to your rental property. Then, in January 2012, you should be ready to have the forms prepared. Note that the IRS will penalize you $100 for each 1099 that you do not send to them.
There has been some discussion that the IRS may repeal this requirement. However, to date this has not happened. Should you have any questions, please contact us so that we can assist you.