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New Guide to 1099 Filing Requirements for Landlords & Property Managers

by Emily Koelsch
1099 Tax Filing

New Guide to 1099 Filing Requirements for Landlords & Property Managers 

Tax season is here again. It can be a stressful time for Landlords, but good systems and documentation make it as easy as possible. 

As you prepare your taxes, it’s always important to be familiar with recent changes in tax requirements that impact rental properties, Landlords, and property managers. However, this is particularly important this year, as recent tax laws have changed 1099 filing requirements for Landlords and rental income. 

Here’s an overview of those changes and some tips for complying with new requirements. And, as you prepare for tax season, we always encourage you to work with a tax professional or accountant to ensure you comply with all requirements. 

Tax Season

New 1099 Filing Requirements 

The American Rescue Plan Act was passed in 2021 to address unreported income earned outside regular employment. One central part of this act was changing the threshold for reporting rental income. 

Previously, Landlords were required to report any rental income over $20,000, but now Landlords must report income over $600. This change is significant and will impact many real estate investors, especially smaller-scale investors.

The Act also requires that payment processors provide Landlords and property managers with a 1099-K form documenting rental income. Under this change, if your Tenants pay rent electronically through Venmo, Zelle, Paypal, or Landlord software, you’ll receive a 1099-K from this third party. 

Because of the logistical challenges of this shift, payment processors have until tax year 2024 to implement this change. However, Landlords are still responsible for reporting the income this year even if they don’t receive a 1099-K from their payment processor. 

1099 Forms for Landlords 

To help you better understand this new requirement, we’ll talk through what 1099s are and the most relevant 1099 forms for Landlords. 

A 1099 is a form used to document non-employment income. There are over 20 different types of 1099s, but there are three that Landlords and property managers need to be familiar with: 

  • 1099-K: This is the form you’ll receive if your Tenants pay rent through credit cards, debit cards, or electronic transfers. For example, if you use a rent collection app or Venmo to collect rent, this income should be documented with a 1099-K. 
  • 1099-NEC: This form documents payments to non-employees for services. For example, if you pay an independent contractor $5,000 for work on your property, you must provide them with a 1099-NEC. Landlords and property managers should issue this form to any independent contractor who does more than $600 of work. 
  • 1099-MISC: This form is for miscellaneous income. If your Tenants pay rent with cash or check, use this form to report any rental income greater than $600. 

Landlord Tips for Tax Time 

As you prepare for tax season, here are a few tips to help you deal with these changes. 

  • You can file 1099s by mail or online. If you have more than ten 1099s, you have to file them electronically. 
  • Keep copies of all 1099s for at least three years. 
  • Even if you don’t receive a 1099-K this year for rent paid electronically, you still need to report that income. By tax year 2024, you should receive a 1099-K from the third party that handles your electronic payments. 
  • If a corporation owns a rental property, it’s not required to file a 1099 form. However, if the property owner is an LLC, 1099s must be filed when applicable. 
  • You don’t have to file a 1099-NEC for maintenance work done by a corporation. 

We hope this article helps you understand new filing requirements for Landlords and property managers. But, it’s important to note that we aren’t accountants or tax experts, and we always encourage Landlords to consult tax professionals for tax advice. 

However, we are experts in tenant screening, Lease Agreements, and property management. Visit ezlandlordforms.com to customize your property management forms and get real estate investing tips. 

Emily Koelsch, ezLandlordForms Contributing Writer

Emily Koelsch WriterEmily Koelsch is a freelance writer and blogger, who primarily writes about business, real estate, and technology.

 


 

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