If you own or are thinking of investing in a vacation/rental property, hereâ€™s something you need to know. In 2011 a new tax law requires owners, of even a single unit of rental property, to submit a 1099 to any vendors you hire throughout the year.
The vendor must be paid more than $600.00 during the year so this will apply to housekeepers on vacation rentals and any large jobs you would hire an independent contractor for including plumbers, electricians, painters, landscaper/gardeners, and handy men.
So, track your payments, even if it is on a credit card, and at the end of the year anyone who is over $600.00 needs to be sent a 1099 to file with their taxes. Failure to file, or late fees may cost you up to $250.00 in penalties. Consider hiring a bookkeeper, but keep their fees under $600.00, or else theyâ€™ll have to send themselves a 1099 from you.