With the new year comes a new law that applies to owners of rental properties. For the first time, rental owners will have to issue 1099s to service providers (accountants, lawyers, unincorporated plumbers and electricians). This applies to payments made after January 1, 2011.
And starting on January 1, 2012, rental owners will face even stricter 1099 requirements, as will all businesses. Starting in 2012, businesses and rental owners will have to issue 1099s to anyone and any company that they purchase more than $600 of ANYTHING from -- including purchases of goods, supplies, inventory, etc.
Thus, if you own a rental house and you pay the utilities, you'll have to issue a 1099 to the utility company, starting in 2012.
I think Congress will provide relief to the stricter provisions that take effect in 2012. But I think the stricter 2011 requirements on rental owners are here to stay.
Read prior coverage of the 1099 issue here, here and here.
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