Our Landlord Clients are the intended recipients of this blog article.
It’s that time of year again…time to prepare for 1099s! Each January, we generate our clients and third-party vendors 1099s to capture and report the previous year’s income to both you and the IRS. If you haven’t already, please reach out to your Accounting Specialist and make sure your mailing address is correct, especially if you’ve moved since the start of the year.
We follow all IRS regulations when it comes to processing and filing 1099s, but here are a few highlights to keep in mind when you’re reviewing yours and comparing it against your year-end statement.
First: The IRS considers us, as your agent, receiving funds on your behalf exactly like you received it directly from the tenant. Regardless of who actually receives the rent payment, if the tenant paid it, we must report it.
Second: The above point applies both to rent due during the calendar year, January-December, and any prepayments or past-due rent that does not fall within the calendar year. So, if your tenant owed rent for November 2022 and paid it in January 2023, it’s reported as income for 2023, not 2022. If your tenant prepaid their January 2024 rent in December 2023, it’s reported as income for 2023, not 2024. This works the other way around as well. If your tenant paid rent for January 2023 in December 2022, you’re not being taxed on January’s rent this year because it was included in last year’s income.
Third: Only rent income is reported on a 1099. If you were reimbursed for utilities or repairs during the year, that will show up on your year-end statement but not on your 1099. If you have questions about what you should declare or report on your taxes, please reach out to your accountant or a CPA. We are not accountants here and will not give you tax advice. This applies to any deductions as well. They will be included on your year-end statement but not your 1099. If you have questions about the information on your 1099 or year-end statement, please reach out to your Accounting Specialist, we’ll be happy to review your documents but won’t offer any tax advice.
Lastly: We must file our 1099s with the IRS by specific deadlines. If you have any information that needs to be updated, including but not limited to your address, taxpayer information, name, etc., please give that to us as soon as possible. Once we have created the file for the IRS, we cannot make any changes to it.
Colorado Realty and Property Management, Inc.