Tax Law Change for Rental Property Owners.
There are new requirements for owners who want to deduct maintenance, upkeep and repairs on their taxes for rental property.
The Small Business Jobs and Credit Act, which was passed by Congress and signed into law by the President in late September of 2010, contains the following statement:
"If a property owner uses the services of a gardener, plumber, housemaid or handyman of any type to work on his/her rental property and pay the worker of contractor directly $600 of more (including materials and parts) the owner must issue the worker a Form 1099-MISC."
In order to fill out Form 1099-MISC, the owner will need the workers tax identification number (most often the Social Security Number), their address and the amount paid. In order to get the Tax Identification Number, the owner will need to give the worker a W-9 to fill out.
This new reporting applies to rental income generated after December 31, 2010.
Given the fact that in California, many of the workers do not have Tax Identification Numbers or even Social Security Numbers, it may be difficult for a rental property owner to comply.
The intent of this blog was to make you aware of the new tax law, not necessarily to provide tax advice. My suggestion to your Rental Property Owner clients is to contact their Tax Professional to see how this law affects them.
Comments(2)