1099-MISC to landlord

[alex468]

I was laid off from my job and started a modestly profitable business with a home office, and I'd like to take the home office rental deduction. I wasn't aware until today that the IRS seems to require that I send a 1099-MISC to my landlord, and in order to send my 1099-MISC, I'll need to obtain my landlord's SSN, and in order to obtain his SSN, I'll need to send him a W-9.

In a world where so many people are worried about their privacy and about identity theft, I'm concerned that my landlord may simply refuse to fill out the W-9, and if I insist or send a certified letter or take whatever steps the IRS wants me to take then he won't renew my lease, he'll find another tenant who doesn't muck around with such things, and I'll have to find a new place to live and work.

The tax law is ass-backwards for allowing people who pay rent to a corporation or real estate agent to NOT send a 1099-MISC while people who pay rent to an individual are expected to take this invasive step with someone who has control over their living situation. It's a typical example of corporations and organized interest groups successfully lobbying to reduce their paperwork while individuals get screwed coming and going, and, basically, I don't want to 1099-MISC my landlord, I don't want to bother my landlord, and I'm wondering if there's any way to avoid taking this step and still safely claim the deduction other than writing my congressman to try to get the law changed.




What is the name of your state (only U.S. law)? MA

 

[tranquility]

I don't want to bother my landlord, and I'm wondering if there's any way to avoid taking this step and still safely claim the deduction other than writing my congressman to try to get the law changed.

No.

THIS is your tax outrage? My goodness.

 

[alex468]

Thanks for taking the time to give a direct answer.

Yes, if it's correct, I DO find it outrageous that the government may require that I know my landlord's social security number in order for me to safely deduct rent as a business expense for a home office. If I were a landlord concerned about identity theft, I'd be reluctant to provide my SSN to a tenant, especially a new tenant. THAT is my tax outrage. I understand that it is not yours. My goodness.

Oh...and there also is the fact that I also seem to have missed the Jan 31 deadline to send a 1099-MISC because I was unaware of the situation until today, so now I'm in the position where not only don't I know whether to bother the landlord with the whole thing and risk not having my lease renewed but I also don't know what to do about being late.

With hindsight, I'm starting to realize that maybe I should have kept receiving unemployment benefits instead of starting my own business and dealing with these types of issues. Choosing between the risk of a lease termination and the risk of a tax audit is what folks like me get in 2012 USA for not being a leech on the public dole. Hopefully, if I am audited, as a new teensy business-owner, I'll be able to use ignorance as a teensy excuse.

Or more likely, I'll just end up paying the difference if I'm audited.

 

[tranquility]

With hindsight, I'm starting to realize that maybe I should have kept receiving unemployment benefits instead of starting my own business and dealing with these types of issues. Choosing between the risk of a lease termination and the risk of a tax audit is what folks like me get in 2012 USA for not being a leech on the public dole. Hopefully, if I am audited, as a new teensy business-owner, I'll be able to use ignorance as a teensy excuse.

Awesome example of the cost of taxes and their complexity for compliance.

(Any landlord of any size has a different number they will give you. All they have to do is fax in a form or make a phone call, send a letter and they get a number they can use just for such purposes. It's really easy.)

As to the whining over how to negotiate your lease because you demand what the government demands you demand....(All I can come up with is some smart a[lek] remark about pants and some variation of big boy or grown up, so I'll stop right here.)

 

[alex468]

My landlord is not a landlord of any size. He owns two homes: The one he lives in now and the one he grew up in, which I'm renting. I'm fairly sure that he won't want to make a phone call or use a fax or the net to obtain an ID number. But thank you for the suggestion.

I have nothing but respect for the rights of property owners to do anything they want with their property. After my current lease ends, my landlord has the right to not renew it for any reason, including because I've sent him a 1099-MISC when he'd prefer not to receive one. Negotiation isn't really an issue. If my landlord prefers a non-1099-ing tenant, he has every right to not renew and find the type of tenant he wants after my lease is over.

I suppose big boys must be homeowners. Oh well. At least I get to vote. That's something.

 

[justalayman]

does "your business" even have a contract with the landlord or do you (as yourself) have a contract with the landlord? If it isn't "the business" ,"the business" is not paying the LL, you are.

 

[davew128]

Interestingly enough I just came from a whine and cheese event. However the people there didn't act like it was some form of moral outrage that operating a business has tax reporting consequences.

 

[alex468]

I-the-person, have a lease with the landlord.

I-the-business, am a self-employed schedule-C filing sole proprietorship, with no doing-business-as name.

I'm fairly certain that by using the charming and alluring form 8829 (Expenses for Business Use of Your Home), I-the-taxpayer, am able to claim as a business expense a percentage of my total rent that's equal to the percentage of the area in my home that has been rigorously, fastidiously, and tax-abidingly set aside as the home office for I-the-business instead of being personally occupied by I-the-person. Thus I-the-person is left with a smaller home, and I-the-business has a home office.

I'm also fairly certain that the landlord does not need to receive two checks for this to be tax-kosher, and I-the-business doesn't need to have a separate contract with the landlord to do this. I-the-person, am paying the landlord the total amount, but I-the-business may be required to file a 1099-MISC for just the portion of rent used by I-the-business.

One of us has a headache now.

 

[LdiJ]

Awesome example of the cost of taxes and their complexity for compliance.

(Any landlord of any size has a different number they will give you. All they have to do is fax in a form or make a phone call, send a letter and they get a number they can use just for such purposes. It's really easy.)

As to the whining over how to negotiate your lease because you demand what the government demands you demand....(All I can come up with is some smart a[lek] remark about pants and some variation of big boy or grown up, so I'll stop right here.)

Tranq...at the risk of sounding really foolish since I have been a tax professional for more than 25 years,...since when is someone required to provide their landlord a 1099 in order to take a deduction for office in the home?

And if it was part of that whole 1099 bit that was included in the health care initiative, that was all repealed.

 

[alex468]

davew128: My moral outrage is mostly due to the fact that if I were renting from a real estate agent or corporation instead of from a person, I would not need to file a 1099-MISC.

It seems to me that the presumption is that real estate agents and corporations in this country are trustworthy tax-paying entities, so the IRS does not need a report when I pay rent to them for the business use of my home. But my landlord, on the other hand, as an individual person, is not to be trusted with correctly reporting his rental income. Unlike the agent and the corporation, he needs a reminder from me and a notification to the IRS that I've reminded him about his rental income.

It seems like a clear-cut case to me of discrimination against the individual in favor of the corporation and the professional, and that seems like the exact opposite of the "way things should be." But, of course, you are entitled to your opinion about the matter.

 

[justalayman]

alex468;3000401]I-the-person, have a lease with the landlord.

I-the-business, am a self-employed schedule-C filing sole proprietorship, with no doing-business-as name.

then I guess your landlord has received no money from your business and as such, no need to send a 1099 anything.

I'm fairly certain that by using the charming and alluring form 8829 (Expenses for Business Use of Your Home), I-the-taxpayer, am able to claim as a business expense a percentage of my total rent that's equal to the percentage of the area in my home that has been rigorously, fastidiously, and tax-abidingly set aside as the home office for I-the-business instead of being personally occupied by I-the-person. Thus I-the-person is left with a smaller home, and I-the-business has a home office.

sure but that has nothing to do with your landlord. It is a calculation that you undertake. It is between you and the IRS.

I'm also fairly certain that the landlord does not need to receive two checks for this to be tax-kosher, and I-the-business doesn't need to have a separate contract with the landlord to do this. I-the-person, am paying the landlord the total amount, but I-the-business may be required to file a 1099-MISC for just the portion of rent used by I-the-business.

the LL, plain and simply put, has no contract with the business so he is not receiving any money from the business. He is receiving money only from you, the person.

 

[alex468]

LdiJ? It was repealed?

Oh.

In the words of the late great comedienne, "Nevermind."

http://www.youtube.com/watch?v=V3FnpaWQJO0



Thanks to all.