Corporations, partnerships, individuals and trusts that receive rental income from property should plan to keep additional records in 2011. As a result of 2010 legislation, they will be required to issue IRS Form 1099-MISC to service providers, such as plumbers, painters and accountants, of $600 or more during the 2011 tax year.
This new requirement was approved as part of the Small Business Jobs Act, enacted into law in 2010. Efforts to repeal expanded 1099 requirements failed to pass the Senate twice in 2010. But legislators indicated that Congress may revisit the issue during its next session in 2011.
There is also a “minimal amount of rental income” exception that unfortunately has not been defined as of yet. A “temporary basis” exception also exists.
If you receive rental income, you should start keeping adequate records of payments, until legislation is enacted to the contrary, so you will be prepared to issue correct 1099s by the January 31, 2012 deadline.
For your 1099, you’ll need the name, address and taxpayer identification number of the service provider. You can obtain this information by asking the service provider to complete IRS Form W-9.