How have the 1099 rules changed for owners of rental real estate?

The 2011 year brought a new tax requirement for landlords.  All landlords who receive $600 or more per year must send a 1099 to all service providers that the landlord paid $600 or more during the year, such as plumbers, carpenters, yard services, and repair people.

This rule change applies to both residential and commercial property.  Prior to 2011, this requirement had only applied to those involved in full-time property management.  Landlords will need to gather tax ID numbers from service providers in order to file 1099’s.  Failure to file the 1099’s with the IRS can result in fines of $50 per 1099 not filed.  In 2012, these requirements will expand to cover providers of goods to landlords.