Wednesday, January 19, 2011

New 1099 Tax Filing Requirements for Small Business Owners and Landlords

1099 small business tax filing 

New Law [H.R. 5297, Section 2101(h), the U.S. Small Business Jobs and Credit Act of 2010], became effective on January 1, 2011.  Part of this requires small business people (including landlords) to report payments of $600 or more on IRS Form 1099.

This expands the 1099 reporting requirement related to a trade or business.  Under prior law only those real estate professionals engaged in property management-type businesses have been required to file Form 1099. 

This new federal law extends the Form 1099 requirement to any person who receives rental income.  This requirement applies to any landlord (including a small investor, residential and commercial), rather than only those who are in the business of managing property.

Starting January 1, 2011, any person who receives rental income must provide a Form 1099 for all payments of $600 or more made to service providers such as plumbers, carpenters, yard services and repair people (Purchase of goods not included within this reporting requirement). 

Form 1099 must be completed and provided to the IRS and to the service provider, and this applies to both residential and commercial property.

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This is for information only and not the providing of tax or legal services. You should consult with your income tax professional or certified public accountant about tax filing requirements for your situation.

Harrison K. Long - solutions for real estate and business - REALTOR® and broker associate, Coldwell Banker Residential Brokerage - 949-854-7747 (phone) - ExploreProperties@gmail.com (email) - CA DRE 01410855 - SFR short sale and foreclosure resource certified by the National Association of REALTORs®.

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