Keep Track of Rental Property and IRS Form 1099: An owner of one or multiple rental units must start tracking all vendors doing at least $600 worth of work for the owner. If you are such an owner, federal law now mandates you to send all the providers of services an IRS 1099 form for the year. The Small Business Jobs Act of 2010 expanded the requirement to all property owners.
If you own a property that you rent out, you are required by law to record the amount you pay them over the course of the year. Once the amount you pay to a particular provider reaches $600, you will have to file a 1099 form before January 31, 2013. Providers for a rental property include independent contractors, such as plumbers, electricians, painters, cleaning services, gardeners, landscapers, repair people, and people holding similar employment.
It is always a good idea to keep track of your finances, especially when you hire others to perform work for you. Keeping records for each individual provider can help avoid disputes with the provider and will help you comply with the new law. Late filing or failure to file the 1099 will cost you $250 in fines. If you would like help to understand or comply with the law, please call our offices today.