Landlords Have To File 1099s
The I.R.S. is now treating rental properties as a trade or business for 1099 reporting purposes. This means that landlords will have to keep track of expenses paid to service providers. Then they must issue 1099 Misc statements to any provider they paid at least $600 during the course of a year.
This law applies to any type of property. Whether it’s a commercial, residential rental or second home that an owner rents out to help defray the costs.
The best way to assure that you have the information needed at tax time is to have W-9s. Let your contractor or other service provider know that you’re complying with the new law. Have them fill out the form prior to them doing any work for you.
Unfortunately many property owners aren’t aware of this law. But it will not stop the I.R.S. from levying penalties if they chose. Filing form with incorrect information will cost a landlord $100 and doubles to $200 for not filing the form at all.