Updated Guide to 1099 Forms for Property Landlords (2024)

The information in this article is intended to be a general overview for property managers and landlords on the recent changes made to 1099 Forms. Because every portfolio and situation is different, as well as different states may have additional laws, make sure you consult an accountant, attorney, tax professional, or financial advisor to ensure you are submitting correctly, as well as maximizing your returns/deductions.

The Basics of Form 1099 for Landlords

The IRS uses various 1099 Forms to report different types of income, including annual taxable income. These forms are often confused with Schedule E, but they are distinct, as Form 1099 is used to report specific income outside of what you may report on Schedule E.

There are 20 types of Form 1099 (full list available on the IRS website). The forms most relevant to rental property owners, landlords, and property managers are:

Key Forms for Landlords and Property Managers

1099-MISC: Used to report miscellaneous income. This is most commonly used for reporting attorney fees and commercial rents.

1099-NEC: Used to report payments to independent contractors (non-employees) such as maintenance workers, plumbers, electricians, and more.

1099-K: Used to report payments processed through third-party networks (e.g., PayPal, Venmo, or platforms like Hemlane), provided you meet certain thresholds.

Pro Tip: If you're using a software platform like Hemlane, it can help you automatically file 1099-Ks if you meet the required criteria. For example, if you receive more than $5,000 in payments, Hemlane will file the 1099-K on your behalf.

Since 2020, the IRS has revamped the 1099-MISC form and brought back the 1099-NEC. Previously, nonemployee compensation (such as payments to contractors) was reported on 1099-MISC, but now it is reported on 1099-NEC. This update marked one of the biggest changes to Form 1099-MISC in over three decades.

Form 1099-NEC: When Do I File?

Form 1099-NEC is used to report nonemployee compensation, including payments to independent contractors. For example, if you hire a contractor to handle plumbing, electrical work, HVAC repairs, or lawn maintenance, you may need to file Form 1099-NEC if the total amount paid to that contractor is $600 or more during the calendar year.

Pro Tip: Always get a completed Form W-9 from contractors before you make payments. The W-9 will help determine if the contractor needs a 1099-NEC, and it provides the correct tax identification number (TIN), which is necessary for your filing. If the TIN is incorrect or missing, the IRS may reject your form.

Examples of Payments Requiring 1099-NEC:

• Attorney fees
• Handyman or maintenance services
• Electrical or plumbing services
• Appliance repairs
• HVAC work
• Landscaping
• Pest control

Remember, you do not need to file a 1099-NEC for payments to corporations (although most contractors in the rental industry are LLCs, which are still subject to 1099-NEC filings). Always confirm the business structure of your vendors and use the W-9 form to verify this.

Form 1099-MISC: When Do I File?

Form 1099-MISC is used to report miscellaneous income such as rent payments and royalties. You will need to file a 1099-MISC for each person or entity that you’ve paid $600 or more in the following categories:

• Commercial Rent (Box 1): Payments for leasing office space or commercial real estate.
• Royalties or Broker Payments (Box 2): $10 or more in royalties, such as payments to real estate brokers or agents.
• Attorney Fees (Box 10): Payments for legal services that are not part of a settlement (e.g., eviction services or rent collection).

Exceptions to Filing Form 1099-MISC or 1099-NEC:

• Payments to corporations (unless you're reporting backup withholding).
• Payments for goods (not services).
• Payments to real estate agents or property managers—however, the real estate agent or property manager must file Form 1099-MISC to report rent paid to the property owner.
• Payments made via credit card or third-party payment networks (e.g., PayPal or Hemlane).

Form 1099-K: What You Need to Know

Form 1099-K is used to report payments made through third-party payment processors. If you receive over $5,000 in payments through a platform like Hemlane, PayPal, Venmo, or Stripe, then the platform will issue a Form 1099-K.

This is important because, if you use such a platform, you generally do not need to file Form 1099-MISC or 1099-NEC for these transactions, as the payment processor already reports the income to the IRS.

2024 Deadlines for 1099 Forms

• Form 1099-NEC: Due to recipients by January 31, 2024, and must be filed with the IRS by January 31, 2024 (whether on paper or electronically).
• Form 1099-MISC: Due to recipients by January 31, 2024, and must be filed with the IRS by February 28, 2024 (if filed on paper) or March 31, 2024 (if filed electronically).
• Form 1099-K: Due to recipients by January 31, 2024, and filed with the IRS by February 28, 2024 (if filed on paper) or March 31, 2024 (if filed electronically).

Pro Tip: To avoid penalties, file forms on time, and make sure that you electronically file forms as early as possible. The IRS requires electronic filing for 250 or more forms, but it’s always a good idea to file electronically regardless of the number of forms you're submitting. You can use the IRS FIRE system for electronic filing.

Submitting 1099 Forms to Your State

Some states require you to file 1099 forms with their local tax departments. Below is a list of states that do not require 1099 forms to be submitted:

• Alaska
• Florida
• Illinois
• Nevada
• New Hampshire
• New York
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming

Some states participate in a program where the IRS will forward relevant forms, but only if they are filed electronically. Check with your CPA to ensure compliance with your state’s specific requirements.

For more details on specific forms and filing, check the IRS resources for Form 1099-MISC, Form 1099-NEC, and Form 1099-K.

By staying on top of these deadlines and understanding which form applies to each situation, property managers and landlords can ensure they remain compliant with IRS reporting requirements and avoid penalties. Always consult with a tax professional to get personalized advice based on your specific circumstances.