Q: I’ve heard that the new tax bill signed by President Obama in late September 2010 affects landlords — that we will have to file 1099s when we pay contractors over a certain amount. Is this so? What a pain! –Chris F.
A: You heard right. On Sept. 27, 2010, President Obama signed the Small Business Jobs Act of 2010, a hefty bill that aims to spur small-business hiring through measures designed to make credit more available and to give small businesses many tax breaks.
But deep within the bill there’s a section titled "Reducing the Tax Gap" (Subtitle B, Part I), and you can imagine what that means — bringing back into the Internal Revenue Service tax coffers some of the money that the rest of the bill leaves in the pockets of those small businesses. The landlord provision is one of them.