- Moderator
- #1
As reported by the Examiners Susan Ferrechio, a provision of the Small Business Jobs Act passed by Congress last fall mandates that rental income be subject to the same tax reporting requirements as a business or trade. The law went into effect January 1st. Ill leave it to the Journal of Accountancy (its one of your morning must-reads, right?) to explain what this means for property owners:
Thus, rental income recipients making payments of $600 or more to a service provider in the course of earning rental income are required to provide an information return (typically, Form 1099-MISC, Miscellaneous Income) to the IRS and to the service provider. This provision will apply to payments made after Dec. 31, 2010, and will cover, for example, payments made to plumbers, painters or accountants in the course of earning the rental income.
While rental property owners will not actually issue the required 1099s until early 2012, they need to start keeping adequate records of payments starting Jan. 1, 2011, so they will be prepared to issue correct 1099s. They will also need to obtain the name, address and taxpayer identification number of the service provider, using Form W-9 or a similar form.
Washington Examiner
Well isnt this just dandy. I have owned rental property in the past and I happen to be in the process of acquiring a new one at this very moment. What possible service could this reporting requirement serve? How could this benefit anyone other than bureaucrats in D.C. who need a job? This does nothing at all other than burden small business owners and rental property owners with excess paperwork and regulation that seemingly do nothing. This is the kind of inanity that I want to see the new Republican House tackle and rid us of.