In the past, only some rental properties were required to issue forms 1099 for services to their vendors (i.e. repairs, gardening, pool service, electricians, painting, accountants, attorneys, management services, etc.). Many rental properties previously did not have a requirement to issue forms 1099. The recent tax law has greatly expanded the 1099 filing requirement for rental properties. Starting in 2019, one of several requirements for a rental property to qualify for the 20 percent Section 199A “qualified business income” tax deduction is that it must issue forms 1099 to its qualified service providers. The filing due date for 2019 payments is by January 31st, 2020. If your rental property meets all other requirements for this 20 percent QBI deduction you should take action now to gather the necessary information on your vendors to be able to file forms 1099 on time by January 31st. This information includes payee’s legal name, Tax ID in the form EIN or SSN, address and amount paid during the year. Please contact our office for any assistance with the filing. Due to the short filing period in January we will need to receive this information from you by no later than January 10th, 2020 in order to file on time by January 31st.
Here is a recent article from the Wall Street Journal on this topic: