Has anyone heard whether the 2011 congressional repeal of 1099 Misc filing requirements still stands in 2012? This was applicable to rental property owners who paid independent contractors for services in excess of $600.
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The repeal was permanent. -
Thank you. I spent a half an hour on the IRS help line this afternoon, but was cut off before anyone could confirm this.Comment
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Google and this board will be of far greater assistance to you than the IRS help line (especially if you are just calling the general help line for the public). The search function in the upper right corner is a great way to start researching here if you have a question you think may have already been covered.Comment
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And let us not forget that just because you are not required to submit a 1099m to an IC, when you own rental property, doesn't mean you can't.Believe nothing you have not personally researched and verified.Comment
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Thank you both for your comments. Regarding taxea's comment I agree that it wouldn't hurt to make the filing, but my clients were a bit dubious about how their ICs might react. In doing some of the research that KBTS mentioned I found similar client concerns mentioned in a 2010 post. At any rate, I appreciate the help.Comment
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Credit Card Payments
OK, so working with a client with bookkeeper using QB to prepare Forms 1099. One vendor was paid via credit card each month. That appears on her list for 1099s. But, doesn't the credit card issue a Form 1099-K to that vendor? Do we issue a Form 1099-MISC also? Or, do we not?Comment
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Credit Card payments are excluded and if entered in QB correctly will not show on the list, I never had to deal with this and cannot remember what needs to be done in QB. Has something to do with an abbreviation in the check number.
What I am wondering about is why in the world, if these requirements are repealed, do the question about the 1099's still show on Schedule E?Comment
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I suppose in the event that the rental owner chooses to issue 1099m to IC's. I recommend this practice because these are the people, some of which try to hide income by asking for cash payments for the work they do.Originally posted by Gretel View PostBelieve nothing you have not personally researched and verified.Comment
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Still doesn't make any sense. Actually, the rentals I am thinking about I do a lot of work, so my fees are well over $600 on each on of them and are the only required 1099's, if indeed they are required. So, I really would like to find out for sure.Comment
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Just a thought - in some cases It may be necessary for Real Estate Professionals?Originally posted by Gretel View Post
If a landlord "chooses" to file a 1099MISC the "yes" box would not need to be checked as it is not required.Comment
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That is a good point. He is a Real Estate Professional and by that demonstrating that he is the the business of renting.Originally posted by Jesse View PostComment
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If the IC has nothing to hide, they hide nothing. I base my recommendation on the fact that I have experienced IC's with local business licenses' asking for cash payment. What other reason could they have than to be failing to report this income?Originally posted by cjg5820 View PostBelieve nothing you have not personally researched and verified.Comment
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A Real Estate Pro files a Sch C, not Sch E and because it is considered a business is required to file a 1099m to IC's.Originally posted by Jesse View Post
If the owner/landlord of a rental, who is not an RE Pro and who files a Sch E, I think should check yes if issuing 1099m.Believe nothing you have not personally researched and verified.Comment
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With all due respect
in my professional opinion you are incorrect.
Originally posted by taxea View Post
Schedule C (Form 1040), Profit or Loss From Business
Generally, Schedule C is used when you provide substantial services in conjunction with the property or the rental is part of a trade or business as a real estate dealer.
Providing substantial services. If you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service, you report your rental income and expenses on Schedule C (Form 1040), Profit or Loss From Business, or Schedule C-EZ (Form 1040), Net Profit From Business. Use Form 1065, U.S. Return of Partnership Income, if your rental activity is a partnership (including a partnership with your spouse unless it is a qualified joint venture). Substantial services do not include the furnishing of heat and light, cleaning of public areas, trash collection, etc. For information, see Publication 334, Tax Guide for Small Business. Also, you may have to pay self-employment tax on your rental income using Schedule SE (Form 1040), Self-Employment Tax. For a discussion of “substantial services,” see Real Estate Rents in Publication 334, chapter 5.
Real estate professionals. If you are a real estate professional, complete line 43 of Schedule E.
You qualify as a real estate professional for the tax year if you meet both of the following requirements.
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More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate.
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You perform more than 750 hours of services during the tax year in real property trades or businesses in which you materially participate.
If you qualify as a real estate professional, rental real estate activities in which you materially participated are not passive activities. For purposes of determining whether you materially participated in your rental real estate activities, each interest in rental real estate is a separate activity unless you elect to treat all your interests in rental real estate as one activity.Comment
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