If you are a landlord, you need to get ready for 2012, now. The Small Business Jobs Act of 2010 imposed a new requirement that recipients of rental income (landlords) are required to file a 1099-MISC with the IRS for every service provider they paid more than $600. This requirement starts for payments made after December 31, 2010. So if you own rental property and you pay your plumber over $600 in 2011, you must file an information return with the IRS and provide the plumber a copy of this return by February 28, 2012 or be penalized (if caught not filing the 1099-MISC).
In order to accurately complete the required 1099-MISC you will need the person's name or company name, address, and social security number. If you don't have this information, you are supposed to withhold 28% of what you owe the service provider and send it to the IRS for him. My advice: download and print several copies of Form W-9 to have your plumber or other service provider complete before you hand him a check.
This reporting requirement has some exceptions. You don’t have to file a 1099-MISC if the rental income is a minimal amount; or when substantially all rental income is derived from renting the individual’s principal residence on a temporary basis; or for any individual for who the requirements would cause hardship. However, as of today, nobody knows what is a “minimal amount”, “substantially all”, “a temporary basis”, or what is meant by “hardship”.
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