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New for 2011: 1099 reporting for rental property owners

Categories Tax Tips (Fed)

Newfor2011:

1099reportingforrentalpropertyowners

 

 

 

 What:

Forpayments after12–31–10,recipients ofrental incomeare requiredtofileForms

1099–MISC forallaggregatepaymentstotaling$600ormoretoaserviceprovider

(handyman, painter, plumber,lawncareperson, accountant…).

 

 

 Who:

Thislawappliestoallrental income recipientsexcept:

●Military orintelligencememberswho renttheirprincipal residenceona temporary basis.

●Individualswho receiveonlyminimalamounts ofrent(notyetdefinedbythe

treasuryregulations)

●Individualsforwhomthe regulationswouldcausehardship(notyetdefined bytreasuryregulations)

 

 

 Howtocomply:

●Landlordsshouldgiveeachserviceprovidera FormW–9(RequestforTax payerIdentificationNumberandCertification).  Thisformshouldberetained bythelandlord,notsenttothegovernment.  FormW–9is available on the forms & worksheets page.

●IfFormW–9informationis not providedbytheserviceprovider,thelandlordis requiredtodeduct28%backupwithholdingfromthepaymentforservices.

●AForm1099–MISC isissuedbythelandlordtoeach       serviceproviderpaidan aggregateof $600ormoreforthecalendaryear2011byFebruary1of 2012.

 

 

 Consequencesof non-compliance:

●Thelandlordwill losethedeductionfortheservices.

●Penaltieswillbeimposedforeach1099nottimelyfiled:

 ●$30foreachreport upto30dayslate

 ●$60foreachreportfiledfrom30dayslateuntilAugust1

 ●$100foreachreportfiledafterAugust

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