From Carol McAtee’s CPA firm in St. Petersburg, FL – Beginning in 2011, taxpayers receiving rental income will be required to file information returns (Form 1099) with the IRS for all rental property expenses paid by the taxpayer in amounts of $600 or more per service provider per year. For example, if a rental property owners hires a plumber, painter, or landscaper to work on their property, payments made to the worker must be reported if they are in excess of $600 per year.
Previously, rental expenses did not have to be reported on information returns by taxpayers unless they were considered to be in the property rental business. Now, with some limited exceptions, all taxpayers who rent property are considered to be in the rental trade or business for the purposes of filing information returns for rental expenses paid.
There are exceptions to the new filing requirements for individuals who rent their principal residence on a temporary basis, including active members of the military; and for individuals who receive rental income of a minimal amount, as determined by the IRS.
Call the tax professionals at McAtee & Associates, if you need help with reporting your rental expenses. Contact us for assistance in all of your financial and tax matters.
ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY ACCOUNTING CONSULTANTS TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.
