Did you prepay your 2019 rent so you could claim a big 2018 tax deduction?
That could be a very smart more. Or it could open the door to huge problems for you and your landlord.
You see, if you prepare your 1099-MISC based on your checkbook or payment ledgers, it’s very possible you’ll create an incorrect 1099 for your landlord. And an incorrect 1099 that overstates the landlord’s income can quickly lead to a tax audit … not something your landlord is looking forward to!
If you want to handle things properly and keep your landlord and Uncle Sam happy, read my new article titled Tax Tips: Avoid IRS Audits: Fix the 1099 Prepaid-Rent Mismatch.
Three ways our fact-filled article can help you:
- We’ll explain technically correct reporting procedures. For starters, we’ll provide an overview of how the rules governing a 1099 work. We’ll even quote from specific sections of the law to show you exactly how the IRS expects you to complete your 1099. If you want to stay on the right side of the law, I urge you to read the full article.
- You’ll learn what problems your landlord will face if your 1099 is incorrect. If the income stated in your landlord’s tax return is less that the total of his 1099-MISCs, you can bet the IRS computers will pick that up and trouble, BIG trouble, will start. If you want to avoid creating huge problems for your landlord, read the full article.
- We’ll show you three audit-proof tactics that will keep you safe. It’s worth reading this issue of the Tax Reduction Letter for this information alone. These tactics are easy to use and can save you and your landlord a tremendous amount of grief. Don’t wait! Read the full article.