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Old 01-17-2011, 11:33 AM   #1
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Rental Owners Req'mt For 1099's

Apparently, in the new HealthCare laws, is a requirement that rental property owners must issue 1099 forms to persons/companies that perform over $600 in services/maintenance on your rental properties.

Some discussions resulting from this have indicated that some would parcel out this effort into smaller increments so that they dont aggregate more than the $600 threshold.

Others have rental agents/mgmt companies who are assumed will perform this function for them. Danger here is that these agents/co's may increase their mgmt fees to cover this larger paperwork function.

I have also read of one Congressman's effort to repeal this portion of the law.

It, supposedly, was put into law to catch those that were getting paid under the table for efforts that were in fact, unreported business income.

Currently to take effect Jan 2012. I sure hope it gets killed prior to implementation.
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Old 01-17-2011, 08:13 PM   #2
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rental

thanks for the heads up , i have two properties that are up for rent just getting into this kinda thing so thanks for the info
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Old 01-18-2011, 06:53 AM   #3
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Paying out the money in smaller amounts won't cut it as it's a total of $600. for the entire year. I have several rental properties and this is going to be a logistical nightmare..... Not only for me but for all I do business with . This is an example of legislation at it's worst.
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Old 01-18-2011, 07:08 AM   #4
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Well in Wisconsin we always knew if you hire someone and pay them more than $600 they are considered and employee and if only a temp then they get a 1099.
Thought it was that way every where.
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Old 01-18-2011, 11:28 AM   #5
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It's been true in recent past (20+years) that if you have an employee you are required to issue a Form W-2 to report their income. Also if an Independent Contractor, (a person that is not an employee) is paid $600 or more per year, you should issue a Form 1099 to report thier income. It is in your best interest to use both the forms as it allows you to deduct business expenses for your business.
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Old 01-18-2011, 01:52 PM   #6
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You need to obtain some form W-9's which you can download from the IRS website. Have the subcontractor fill out the form and then you have the info for the 1099's. If your total rental income for the year is less than $600 then you don't have to comply with the new law. Be careful because willful failure to file can result in some very stiff penalties.

One of the write-ups on the new law refers to being in the "trade or business" of renting real estate. That is the same terminology that is used to refer to a business that is subject to social security taxes or more precisely, self-employment taxes. If I had to make a bet, I'd bet that sometime in the future you'd see net rental income subjected to self employment taxes. Just a guess on my part.
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Old 01-19-2011, 06:12 AM   #7
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Quote:
Originally Posted by StStg1 View Post
It's been true in recent past (20+years) that if you have an employee you are required to issue a Form W-2 to report their income. Also if an Independent Contractor, (a person that is not an employee) is paid $600 or more per year, you should issue a Form 1099 to report thier income. It is in your best interest to use both the forms as it allows you to deduct business expenses for your business.

That's true when it came to employees and independent contractors who were regularly on your payroll. As an example, I owned my own truck and was under contract to a carrier, I was not an employee but a "independent contractor" and was issued a 1099 at the end of the year, it was not a one time deal. There's a difference between that scenario and hiring a plumber to do a job. Under the new regulation you will need to issue a 1099 to anyone who does $600 or more work for you in a calender year, that means plumbers, electricians, the phone company, power company and gas company etc,etc... I don't need to issue a 1099 to deduct any of these business expenses under the old regs, I just need to have a receipt to prove I spent the money and to whom. These new regs mean more paper work for me and my accountant and therefore more time and money spent by me. Maybe it's no big deal for someone who has one house they rent out but when you have many rental properties like I have it becomes a real problem and one more thing that takes time and money (my accountant doesn't do this for nothing)... It is in MY best interest to leave the money I will spend on the new reg. in MY pocket not the government's.
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Old 01-19-2011, 01:14 PM   #8
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I own two mobile home parks and a dozen rental houses. This law will have minimal effect on me. I'm guessing no more than a half dozen more 1099's than I currently do. For me personally that is a very small price that I'm very willing to pay for the privileged of being able to buy health insurance. I was one of the millions who were able to buy insurance from the pool that was created for people with pre existing conditions. My pre existing condition was that I was too young, 62. I also understand this part of the bill has bi partisan support for removal. Nothing I'm going to get excited about until next year!
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Old 01-20-2011, 05:30 AM   #9
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Originally Posted by vegascouple View Post
I own two mobile home parks and a dozen rental houses. This law will have minimal effect on me. I'm guessing no more than a half dozen more 1099's than I currently do. For me personally that is a very small price that I'm very willing to pay for the privileged of being able to buy health insurance. I was one of the millions who were able to buy insurance from the pool that was created for people with pre existing conditions. My pre existing condition was that I was too young, 62. I also understand this part of the bill has bi partisan support for removal. Nothing I'm going to get excited about until next year!
The thing is (discounting if you're in favor of the health care bill or not) things like this should not be included in a bill aimed at health care.... Personally I am not in favor of the bill, I think it's a cost we as a country can't afford. Countries that have been down this road are now looking at huge costs and are having to ration medical care ( look at the UK), and who do you think are the first to be targeted ....... Yep, seniors . People our age...... So vegas, when was the last time you were told you were too young for something before this ?
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Old 01-20-2011, 08:48 AM   #10
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Looks like another way to get more money to waste on pork
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Old 01-20-2011, 12:02 PM   #11
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I'm sure that I'll get another nasty gram from the administrators for posting this. It seems that injecting politics is OK as long as it's one sided.

First I think we can all agree that injecting unrelated items into bills that go through congress is something we'd all prefer not to see. However, that is the way it's done in our country. It's obvious that IRS is looking for ways to track every dollar we make as too much is done under the table. However, there is no way you could ever get that kind of regulation passed though congress on it's own. Can you name on major bill that did not contain something that was completely unrelated?

The problem with health insurance is that if you have it you don't give a damm if anyone else has it. I know you are going to say that isn't true, but if that is not true why is your answer simply Say NO?

My newly elected congressman just voted to take away my health insurance, but he accepted his government insurance! Just so that he understands what millions of us are up against I'd love to see him have to apply for health insurance just like me. Then he would understand. I just wish that all of you who are against me buying health insurance would loose yours so that you could understand what it's like to be without. If I got sick I'd have to sell all my assets to pay for my care leaving my wife with nothing to live the rest of her life if I was gone. Why is that OK? It's happening to Millions of people in this country!

In my case my daughter had to close her business. I lost my health insurance when she did. I applied to every insurance company I could find, even the ones with AARP thinking they might be more supportive of older folks like me! I got turned down by everyone. I take on prilosec per day, no other drugs. I have no known medical problems. However, at 62, there is a much bigger chance that I will get something that will cost the insurance company. It's obvious why they don't want to cover me. I just never thought it would happen.

Is it right that after paying for health insurance my entire life that I have to do without coverage now because it might mean an insurance executive might not get as big a bonus? I was able to obtain insurance under health care reform, but now the Republicans want to take that away!

You mention cost, but you fail to mention where you got your figures. The non partisan CBO referee who we rely on for cost estimates says that if health care reform is repealed it will cost $240 Billion over 10 years. Let's say you are right and that it costs the same amount as it costs to be in Iraq for one month. Isn't the health of our fellow citizens worth more than that? Keep in mind that in the long run you'll pay it anyway as these people will get some sort of medical care when they run out of money to pay.

Well this is probably my last post. I'm sure I'll be deleted. I could always change my user name but really what difference does it make? My main purpose of being here is to get reviews of RV problems. I know I'm not going to change you mind. I just wish that for just one moment you could put yourself in my shoes and think about how financially devastating it would be if you were to have a medical problem. It's not because I don't want to protect myself, it's because I can't! There are 50 Million people in this country right now that are just like me who for some reason can't buy health insurance! Like it or not this is a big problem and "Just Say No" isn't going to solve it!
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Old 01-20-2011, 05:31 PM   #12
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The concept of repealing the health care was having everybody pay their share of the costs. They are going to force everybody to have insurance and everybody to pay the same. If I was a 25 year old man (Boy, do I wish this.) my health insurance now would be very, very cheap. If I got married and my wife was subject to having a baby, then my health inusrance cost would go up. That is the free market way. The newly passed would have you paying the same as the 25 year old man. Some would think that might be unfair. The idea is for evrybody to pay what they actually costs due to actual health stasticits. Unfortunately now many states have mandated that everybody have many coverages they don't need. Things like preganancy coverage for 62 year old women, alcohol and drug treatmetn coverage for people not needing it and boob jobs for others. Now I have heard today that Berkley, CA is including sex change operations as a covered expense. Who pays for this? Everybody who has insurance. There is n free lunch. Everybody has to pay. What the new congress people are wanting to do is free up the insurance comapnies to go back to the free market way. Everybody would be covered, but they would pay what the stats indicated. You select what coverage you want and what deductable is. It would be like auto insurance. It would be cheaper for everybody on average and people like yourself would be in a high risk pool run by the state on a breakeven basis. Before reaching Medicare age several years ago, we were paying $1946/month for BS/BC. It was a real problem for us believe me. We are both cancer survivors Our state has a guaranteed Issue law where they have to take you, but can really charge. The bad news for BC/BS was they lost money on us even though 1 year we had no charges, we did have several hospital trips each. That CBO estimate you mentioned is riddled with budget gimmicks the most obvious being 10 years of taxes and 6 years of benefits, It is just political gamesmanship. Good Luck and check into that guaranteed issue for your state.
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