Landlords and Rental Property Owners Need To Issue 1099 MISC For Rental Property Expenses

by Property Management on October 15, 2010



4 Oct, 2010: The new jobs and credit act signed by President Obama this week will make most landlords subject to 1099 reporting requirements. Even a private landlord renting out a single-family home will need to report payments for rental property expenses such as plumbing and painting.

The new law considers virtually all landlords to be conducting a trade or business. “So, just like any other business, they have to issue a 1099 MISC for anyone they pay more than $600 in rental expenses in a year,” said Jean-Philippe Choudhry, a member of the IRS’s Electronic Tax Administration Advisory Committee.

The law applies to payments made after December 31 of this year. “This would have been much more of a burden a few years ago,” pointed out Choudhry. “These days, it’s a matter of collecting the information and plugging it in to a filing website such as or”

The act also doubled penalties for failing to correctly report form 1099 and other information. “This shows that the IRS is serious about better compliance with information reporting laws,” Choudhry noted.

According to Choudhry, 1099 MISC reporting is a 3-step process. “First you issue a 1099 to the payee. Then you receive corrections, if any, from the payee. Then you file the forms with the IRS.”

He offers some tips for landlords new to 1099 MISC reporting:

1. Make sure you get a W-9 from everyone you pay. “Do it before you hand over the check, so you can ensure that you get the information,” advises Choudhry. This simple form asks for basic information such as the payee’s name, address, and tax ID number. It’s available at

2. Verify the W-9 information before you file the 1099s. Says Choudhry, “It’s not necessary to obtain a new W-9 for every payment, but it’s a good idea to check the information every year before filing your 1099s.”

3. Currently, you don’t have issue 1099s for corporations, but you do for individuals, partnerships and many LLCs. The W-9 will usually help you determine whether a payee needs a 1099.

4. Use your accounting software to track payments to your 1099 payees over the course of the year.

5. Use a filing website (such as or to mail out the 1099s, and to later file the information with the IRS. Says Choudhry, “These websites are set up to help you pull together the information, print and mail the forms, and process the filing. They also hold everything on a secure server so you can use it again the following year.”

SOURCE 1099 Pro Inc.

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