My CPA, Mike Grinnan shared this troublesome news several months ago. (another reason to stay tuned to AskMikeButler.com) The most disappointing aspect of this new tax law is the “targeting” of landlords and real estate investors.
The rest of the world has an effective date of Jan 1, 2012; however, real estate investors and rental property owners effective date is Jan 1, 2011.
NOW!
Every “anything or anybody” that gets paid more than $600 by you in the calendar or tax year, you must now send them a 1099.
But hold on, this includes utility companies, Home Depot,… Lowes, paint stores, etc. in addition to your independent contractors.
Here’s an article by Mark Hemingway
Are you one of the millions of Americans who own rental property? Do you enjoy filling out lots of extra tax forms? If so, you’re in luck!
As reported by the Examiner’s Susan Ferrechio, a provision of the Small Business Jobs Act passed by Congress last fall mandates that rental income be subject to the same tax reporting requirements as a business or trade.
The law went into effect January 1st. I’ll leave it to the Journal of Accountancy (it’s one of your morning must-reads, right?) to explain what this means for property owners:
Thus, rental income recipients making payments of $600 or more to a service provider in the course of earning rental income are required to provide an information return (typically, Form 1099-MISC, Miscellaneous Income) to the IRS and to the service provider.
Are you one of the millions of Americans who own rental property? Do you enjoy filling out lots of extra tax forms? If so, you’re in luck!As reported by the Examiner’s Susan Ferrechio, a provision of the Small Business Jobs Act passed by Congress last fall mandates that rental income be subject to the same tax reporting requirements as a business or trade.Thus, rental income recipients making payments of $600 or more to a service provider in the course of earning rental income are required to provide an information return (typically, Form 1099-MISC, Miscellaneous Income) to the IRS and to the service provider.
Pasted from <http://askmikebutler.com/new-tax-law-creates-big-headaches-for-rental-property-owners/>
As an astute bookkeeper and student of Accounting, I have been saying for years that business owners should embrace the information reporting requirement and apply it across all vendors regardless of whether their services are provided as an employee replacement contractor or not. Now rental property must report to the IRS and to the vendors. Do you know how tough it is to convince big stores to provide 1099 information? Oh boy is this going to be a busy year!
