I filed my taxes last night. During the meeting I got this info that I thought I'd pass on. Please verify with your own tax professionials:
As part of the ObamaCare Bill, in 2011, for Rental Property a FORM 1099-MISC needs to be issued for vendors, subcontractors, independent contractors, and others when $600 or more per year is paid for. This includes but is not limited to:
- Gardeners
- Landscapers
- Contractors
- Repair services
Expanded 1099-MISC Reporting Starts in 2012 that may expand to non-landlords and may impact us Rehabbers. I'm not sure how this effects rehabbers/flippers this year yet.
You should request that your vendors and contractors submit a Form W-9 which will provide you with the legal name, address and taxpayer identification number for the vendor.
The following penalties will be in effect for the year 2011:
- $30 penalty for filing a 1099 not more than 30 days late
- $60 penalty for filing a 1099 more than 30 days late and before August 1
- $100 penalty for filing a 1099 on or after August 1
- $250 penalty for intentional failure to file
I assume failure to file may increase audit risk as this may tie back to your Schedule C deductions.
The recipient must be provided with his or her copy of the Form 1099-MISC by January 31 reporting income for the previous calendar year. The Form 1099-MISC must be recieved by the IRS by February 28.
Again, I suggest you confirm this info with your tax advisor to see how it impacts you as I am not an accoutant and don't understand this stuff in detail, thus my reliance on experianced professionials.
Can anyone chime in about impact in 2011 to rehabbers? Do I need to issue a 1099 for each tradesman over $XXX?
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