Tax Statements and 1099s: Everything You Need to Know

Tax Statements and 1099s: Everything You Need to Know

Federal taxes may seem like a longtime feature of American life, but the practice of mandating taxes has only been around since 1909. One common filing involves tax Statements and 1099s.

If you are an independent landlord filing this year, you may have 1099-related questions. We're here to help. Read on to learn the basics of how to properly file 1099s.

What Is a 1099 Form?

The 1099 form is an important part of your rental property accounting. Form 1099 is used to report self-employment earnings. It can also report dividends and interest.

The IRS uses 1099s to monitor miscellaneous income. Traditional income is recorded through W-2 forms. 1099 forms help the IRS determine reported income more accurately. 

Do I Need to File One?

As a landlord, you are required to file a 1099 for any contractor you pay $600 or more during the calendar year. Common contractors include maintenance, office workers, and anyone you hire to fix or maintain the properties on a regular basis.

Not filing your 1099 can lead to fees and other penalties, so avoid making the mistake of not filing this important form. 

How to File 1099s

To file a 1099, have your contract worker fill out a W-9. Based on that information, you or an accountant can fill out the 1099. This simple property management step is detailed below.

Tax ID Number

You will need the worker's tax identification number. This could be either the social security number or a business employer identification number.

Contract Worker Address

Next, you'll need to put in the recipient's address. Then you need to list how much money was issued to the contract worker.

Tips for Smoother Accounting

The first year of filing may be tough going. You can make the process go smoother by having good rental property accounting measures in place.

Keep a ledger of payments you make to contract workers. The burden of keeping accurate payment records falls on you as the landlord.

Rather than waiting til the April tax payment deadline to send out W-2s can put you at risk of filing 1099 late, which could lead to penalties. A good time of year to send the W-2 out is in the fall.

Financial Services Through Blue Ribbon Property Management  

Blue Ribbon Property Management offers financial services that can simplify the 1099 process. Our team can handle basic accounting reports. All reports are available online 24/7.

Our software can handle small companies or multi-million dollar properties. The Blue Ribbon team can develop a realistic budget that affordably meets your needs.

When it comes time to file your 1099 forms, you can refer to the online data that is accurately compiled.

Learn More About Tax Statements and 1099s

With prior planning and the right accounting software, you can streamline the process for filing form 1099s. As your landlord business grows, you'll want to improve your system for filing tax statements and 1099s.

Whatever your landlord needs, we're here to help. Contact our office today to see what Blue Ribbon Property Management can do for you.