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Small Business Jobs Act enacts new provision: 1099s will be required for 2011 payments

December 16, 2010
Small Business Jobs Act enacts new provision: 1099s will be required for 2011 paymentsThe recently enacted Small Business Jobs Act includes a provision related to reporting requirements of rental property expense payments. After Dec. 31, 2010, the new law requires those who receive rental income from real property to file 1099s with the IRS for service providers such as plumbers, painters and accountants, who receive more than $600 in payments over the course of the year. Even though the 1099 forms will not need to be issued until early in 2012, it will be necessary to begin keeping track of payment information on Jan. 1, 2011, and to collect completed w-9 forms from service providers to obtain their names, addresses and taxpayer identification numbers. Exceptions are provided for individuals renting their principal residences (including active members of the military), taxpayers whose rental income doesn’t exceed an IRS-determined minimal amount, and those for whom the reporting requirement would create a hardship (under IRS regulations).

Included in the provision is an increase in penalties for failure to file 1099s with the IRS. For further information, contact your tax accountant

3 Comments leave one →
  1. Harry permalink
    January 4, 2011 3:54 pm

    I can’t find the source for this requirement on the IRS website. A local tax conference workbook sites section 6041, so I’ve searched sec 6041, small business jobs act, etc., and all I’ve found is 2012 provisions from the healthcare act, and a page titled “Small Business Jobs Act of 2010 Tax Provisions” which includes nothing about the rental expense reporting requirements.

    All I’m trying to figure out is if this pretains only to UNincorporated services (as is the case already with rental trade/business).

    Does this provision keep the same rules, and only add individual landlords to the requirement, or are 1099’s also required for incorporated service providers?

  2. January 6, 2011 3:42 pm

    Harry, Unfortunately, I have been unable to locate the answer to your question. I would highly recommend you speak to a tax accountant for the best answer-

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