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Tax Tips

New rules for Landlords and 1099s

Effective on 1/1/2011 landlords will have to keep records for anyone that they pay more than $600 for the year .. cash or check . This will cover people like gardeners, handymen, repair men, etc ..if you use a property manager you will probably have to 1099 them.

this means you should have the following forms on hand ..

W9 . url to irs website for this

you also need to notify the state (Employment development Department) as well .you need to file form EDD 542 

1099- misc

At the end of the year you will have to prepare 1099-Misc to send to your contractors and send them to the IRS to.Failure to follow this procedure will result in your losing the deduction for the expense.

In addition, there is a penalty for not filing the 1099s and it goes up depending on how late you are.This penalty is per 1099 and starts at $30 and goes up to $100 depending on how late you are .. and if they rule intentional disregard, then it is $250 .. to a maximum of $500,000 (YIKES) for small business entities

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