“The tax entenders package” is set to expire January 1, 2011. If you are owners of rental property; The IRS requiring rental property owners to file an IRS Form 1099 to all contractors with whom they do business if they pay that contractor more than $600 per year. If you already are filing 1099 forms for vendors whose gross income exceeds $600 per year, you can disregard this notice.
If you are small rental property owners are using the property as an investment or as part of a retirement savings plan. You are not aware of the IRS requirements. Unintentional non-compliance will result in costly penalties, which many owners are ill-equipped to pay. This requirement can be viewed as a trap for the unwary.
Additionally, hiring a tax professional to ensure compliance with the new rules would be costly and create new expenditures for those already feeling the economic pinch.
If you’re worried you’re missing the step, be sure to talk to your CPA.