Even if people have a good grasp on taxes, 64% admit that tax season causes stress. Whether you are filing personal taxes, business taxes, or both, you may find yourself stressed with all the numbers.
As an Orlando landlord, it's best to seek help with tax statements and 1099s. Accurate records and familiarizing yourself with the correct tax forms can streamline the process.
Keep reading to learn more about this.
Types of 1099 Forms
Tax statements and 1099s help landlords file their taxes at the end of the year. There are different types of 1099 forms to know about.
1099-MISC
The IRS requires the use of the 1099-MISC form to report income not reported on standard W2 forms.
Property managers or landlords can file a 1099-MISC for:
- Rental income from cash or checks
- Medical and health care payments
- Non-qualified deferred compensation
- Legal fees
- Prizes and awards
This form is mainly for reporting rent and legal fees costing $600 or more. If you keep security deposits, you'll have to report them as income too.
Property managers handling the day-to-day operations must provide a 1099-MISC form to the investment property owner.
1099-NEC
Rental properties commonly hire outside contractors for maintenance, plumbing, and other issues. The IRS requires you to report the payments to these professionals using a 1099-NEC form.
You'll need this form if you make a payment of over $600 to anyone who isn't an employee.
A property manager should be well-versed in tax documents. Landlords can ask their managers which payment falls into which category if they are unsure.
1099-K
1099-K tax forms are necessary if you use an online payment processor to collect rent payments. If you receive payments through certain online platforms (Zelle, Venmo, PayPal, etc.), you'll file the income in this form.
Collecting rent online is common, so many landlords use this form. There are no alternatives to the 1099 forms, so it's important to know which ones are required.
1099 Filing Options
During tax season, property managers can gather tax information to file 1099s. You can file through the electronic IRS filing system or mail the documents.
If you have to file 10 or more 1099-MISC forms, you are required to do so online.
Some property managers have accounting experience so you don't need to hire a CPA or accountant. Utilizing property management software can streamline the process.
Property managers should provide landlords with the necessary tax forms ahead of time. Getting a leg up on tax season can make the process less stressful.
With accurate information, property managers help you pay landlord taxes and become more efficient. Plus, hiring a property management company is a rental property deduction that landlords can utilize.
Get Help With Tax Statements and 1099s
Landlords can get help with tax statements and 1099s by hiring a property management team.
RightHouse Realty LLC is a dominant force in the Orlando real estate industry. Since 2021, we've quickly established ourselves as a trusted partner for real estate investors looking for comprehensive services. We have a financial management system to simplify ownership and make tax season easy.
For rent collection, expense tracking, and tax reporting transparency, work with us. Check out our testimonials now!
