Finally, fairness prevails!
No more paying "under the table".
This is my response to the folks who are declaring the "extra tax burden" on second homeowners due to the Small Business Jobs and Credit Act of 2010.
There is no extra tax burden, only more paperwork, specifically documenting payment of others and completing 1099s. And actually, for property managers, we already have this system in place and it is much easier then performing weekly payroll.
The naysayers are worried that second homeowner will be overburdened . Yes, the second homeowner will have to buy accounting software and manage the shuffling of paperwork. But why is this an unfair practice? The homeowner is using their second home as a small income producing business? Right. So why not treat it as such and lets be professional and come clean.
The real issue is not in more work for the homeonwers. This is only half of the truth. While soon to be history, the practice of paying contractors/vendors for such routine repairs and cleanings have been paid under the proverbial table. Now it will be law to record, by 1099 documents, all payments to individuals and business' over $600.
Why is it fair to tax some people and not others, especially when they are doing the same job? I am not sure why this is so outlandish. I am glad to see this implemented in January 2011.
I applaud this new tax law. If a second homeowner decides this book keeping is too much, there are plenty of upstanding property management companies who can easily alleviate the pains of this new law.