Tax Reporting Burden Buried in Health Care Reform Impacts Vacation Rental Owners

2/11/11 STATUS UPDATE: According to Accounting Today in the 2/2 issue:
"Senate votes to repeal 1099 reporting requirement
The Senate has approved a measure that would repeal the expanded Form 1099 reporting requirements that were part of last year's health care law. The move has broad support because the Form 1099 rules, which are set to require businesses to report any purchases of more than $600 of goods and services from vendors in a year to the Internal Revenue Service, are expected to increase accounting costs for small businesses. The AICPA supports repeal of the expanded Form 1099 reporting requirements; however, it has asked the Treasury Department for guidance on several pressing issues if the rules are not repealed."

Vacation Rental Owners and Property Managers who pay for goods with cash or checks now have an extra IRS reporting burden in 2011. Our solution: use credit cards for every purchase possible. Unfortunately, we all know that using a credit card is not always possible and often can cost us more as cash prices are often lower because the retailer saves the processing fee.

You should already be issuing 1099s for service providers that are not corporations. Keeping good records and saving receipts just got more important, all at a time when our costs are going up, rentals are still soft, and rates have come down from historical highs...

For an excellent review and explanation of the changes visit HomeAway's Community forum.