1099 Rules for Landlords and Small Businesses

new laws about 1099s and W9s

Do the new tax laws make you feel like this?

Are you confused about the new rules about small businesses issuing 1099’s for anyone that they’ve paid over $600 to?  Has a company asked you to fill out a W9 form because you or your business is doing some kind of work for them?  It seems like everybody is a bit confused, even the IRS.  But here’s help.

The rules have changed several times since the original post. If you’re preparing 1099s or tax returns for tax year 2013–these are the updated rules.

The  1099 law is actually part of the Affordable Care Act although it has nothing to do with health care.  Is your head spinning yet?  Seriously, the new 1099 law states that businesses will be required to issue 1099 forms to contractors that they have paid over $600 to.


So who gets a 1099?   The law started out requiring you to issue a 1099 to anyone, including corporations that you paid over $600.  But there was a lot of backlash over that so you don’t have to issue a 1099 to a corporation now.  This eliminates a lot of 1099s!  This is great news for me because otherwise I’d be issuing 1099s to AT&T, Office Depot, my software company, my landlord, the gas station, and a dozen other businesses.  Now, at least this year, I don’t have to issue any 1099s because everyone I pay is either on my payroll, a corporation, or I paid them under $600.


If you need to prepare 1099s, here’s a link that will give you information on how to do it: How to Prepare a 1099


If you’re a landlord or small business owner you should expect that you will need to file 1099 forms for your  contract laborers this year.  Start collecting information from them now so that you’ll be prepared come January.  You’ll need a W9 form, here’s a link:  http://www.irs.gov/pub/irs-pdf/fw9.pdf

Print it out and have all of your vendors sign one.  You can be hard-nosed about this too.  No W9, no payment.  It’s that easy.

If a business that you provide a product or service to asks you to complete a W9 form, it is a legitimate request.  If you’re a sole proprietor and don’t have an EIN number, you may want to apply for one so that you’re not giving out your social security number all over the place.  If you’d like more information on EIN numbers, read my other post:  http://robergtaxsolutions.com/2010/11/how-to-get-an-ein-number-for-your-business-for-free/

You can get an EIN number directly from the IRS for free.


One question that I’m always asked is, “Is there any way to get out of having to issue a 1099?”  The answer is, “Yes.”  If you pay a vendor with a credit or debit card, you do not have to issue a 1099.  The reason is, when you use a credit card to pay a vendor, the credit card company will be issuing a 1099K statement showing the payment you made.  So, it you want to reduce the 1099s you have to issue, use your credit card more often.


Note:  We try to answer all the questions that come to us but please be patient.  It’s our busy season right now.  We may not get to your post until the weekend.  When you make a post and use the capcha code, it won’t immediately show up.  You see, for every normal person like you that posts, there’s about three advertisements for things your mother wouldn’t approve of.  (We try to keep this a G rated website.)   We have to edit those out.  If you need an answer right away, here are some links that might help:

EIC questions of any kind:  http://www.irs.gov/Individuals/Earned-Income-Tax-Credit-(EITC)-%E2%80%93–Use-the-EITC-Assistant-to-Find-Out-if-You-Should-Claim-it.

How to find free tax preparers:  http://www.irs.gov/Individuals/Free-Tax-Return-Preparation-for-You-by-Volunteers

How to find your local IRS office:  http://www.irs.gov/uac/Contact-Your-Local-IRS-Office-1

If you want to hire us, please call (314) 275-9160 or email us.  We do prepare returns for people all over the country (and a few foreign countries as well.)  We are sorry but we cannot prepare an EIC return for someone outside of the St. Louis area because of the due diligence requirements.

301 thoughts on “1099 Rules for Landlords and Small Businesses

  1. Hi Tiffany,
    So, your invoice doesn’t meet IRS guidelines? Golly gee, I didn’t know that the IRS had guidelines for invoices. There’s a very technical accounting term that we use around the office for matters like this. The term is BULLS*IT.

    Seriously? You have a lease addendum that clearly states the terms and he’s not honoring it? I used to live in Texas, it can be pretty hot – and with no AC – it can be really nasty! And lets be real $60 is not going to be luxury digs!

    I’m thinking that you don’t need a tax person, you need a lawyer. You’ll want to ask about reducing the rent that you pay by the $60 a day that you’re owed. Is it legal to do that in your town/state whatever? That’s out of my area of expertise, but that’s the question I’d be asking your attorney.

    I’m so sorry that you’re having to deal with this. Good luck!

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