Are you confused about the rules for small businesses and landlords issuing 1099’s for anyone that they’ve paid over $600 to? Has a company asked you to fill out a W9 form because you or your business is doing some kind of work for them? It seems like everybody is a bit confused, even the IRS. But here’s help.
UPDATED JANUARY 2016
The rules have changed several times since the original post. If you’re preparing 1099s or tax returns for tax year 2016–these are the updated rules.
The 1099 law is actually part of the Affordable Care Act although it has nothing to do with health care. Is your head spinning yet? Seriously, the 1099 law states that businesses will be required to issue 1099 forms to contractors that they have paid over $600 to.
So who gets a 1099 MISC? Basically, if you own a business, or are a landlord, you need to issue a 1099-MISC to anyone that you’ve paid over $600 to for labor. So, let’s say you pay a computer programmer to set up your office system – you’d issue a 1099 MISC. But if you buy a computer for $1000 – then you don’t. Confused yet?
Okay, here’s another situation – you issue a 1099 MISC to individuals and LLCs, but not to corporations. So, let’s say Roberg Tax Solutions prepares your business tax return for $800. Roberg Tax Solutions is an LLC, so you think okay, I’ve got to issue a 1099 – BUT, Roberg Tax Solutions has elected to be taxed as an S Corporation. Say what? Now you don’t have to issue me a 1099. How do you keep track of that? By looking at the W9. Make sure all contractors you work with complete a W9 form. It will tell you if they are a corporation or not.
If you need to prepare 1099s, here’s a link that will give you information on how to do it: How to Prepare a 1099
If you’re a landlord or small business owner you should expect that you will need to file 1099 forms for your contract laborers this year. Start collecting information from them now so that you’ll be prepared come January. You’ll need a W9 form, here’s a link: W9
Print it out and have all of your vendors sign one. You can be hard-nosed about this too. No W9, no payment. It’s that easy.
If a business that you provide a product or service to asks you to complete a W9 form, it is a legitimate request. If you’re a sole proprietor and don’t have an EIN number, you may want to apply for one so that you’re not giving out your social security number all over the place. If you’d like more information on EIN numbers, read my other post: Free EIN
You can get an EIN number directly from the IRS for free.
One question that I’m always asked is, “Is there any way to get out of having to issue a 1099?” The answer is, “Yes.” If you pay a vendor with a credit or debit card, you do not have to issue a 1099. The reason is, when you use a credit card to pay a vendor, the credit card company will be issuing a 1099K statement showing the payment you made. So, it you want to reduce the 1099s you have to issue, use your credit card more often.
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First, this is a great site, thank you for posting it and perhaps more so for following up in the comments! I hope you have time as things ramp up to take another question.
I started renting out my house after moving out of state due to work. I have a property manager that takes care of most things for me, and I’m wondering about the 1099s. It seems that I read about reporting both income and payments on 1099s, which is confusing as I originally thought it was for misc. income…
My question really is this: when we started, the tenants were paying the manager directly, cash I think, but they took our their cut and deposited the rest into my account. I figured I would just report the deposit as income with my normal taxes. They took out over $600 total though, in case I would need to report that. Then the tenants switched to paying (me) by check, so the manager deposited the whole amount via check into my account, and I sent them a check for their cut. I also paid the manager for other services, like maintaining some equipment, dealing w/plumbers, etc.. For purchases like water heaters, I paid for the equipment directly and him for his time.
If I understand this right (which I probably don’t), it seems like we both might need to send each other 1099s, or at least I would need to send him one with the amount I paid them in checks (for their cut of the rent) plus the service fees. He isn’t a corporation, but a small business. Is that correct? I was going to report the rental income on my normal income tax form (I also have a full-time job). Is that correct?
Again thanks for a really valuable site. Lots of good tips here.
Thanks Jan! Now I have another question, I called paypal and they told me they just send the 1099 if the seller has more than 200 transactions and $20,000+ in sales, now I’m more confused! Should I just put that amount under services? even if is $600
I am a salon owner and I have Independents who lease a station from me. Everyone shares a credit card processing machine. I get a 1099 from the processing company. Do I have to give one to each person that I collect money on their behalf?
Hi James S.
I disagree with your accountants–if you pay with a credit card (or Paypal) then you do not need to issue a 1099. According to page 2 of the instructions for 1099misc reporting: http://www.irs.gov/pub/irs-pdf/i1099msc.pdf you do not need to issue 1099misc to vendors that you paid with a credit card because the credit card company will issue a 1099K to the vendor. (You do not have to issue a 1099K, the credit card company will do that.)
I’ll try to update the post, thanks for the suggestion. This one is getting pretty long.
Excellent thread. As a property manager I would love to see an update to this 1099 discussion posted as a new topic. Frankly which 1099, misc i assume issued by and to property managers and as a second topic between tenants and landlords (when you property manager is involved) would be much appreciated. The reason I suggest a new posting is that literally there are hundreds of pages that follow the initial posting, updates and repeals to laws. PayPal is another area as paying all my vendors and landlords that I manage for PayPal would be a very interesting and cost effective way to avoid all these 1099 filings . My two cpa (one for my tax, and one for my parents but I help them prepare as they are elderly) state that regardless of method of payment i should report all payments in a 1099. For example I paid 5000 in check and 10000 in credit card to an attorney. So the 1099 should be 15000 … But if I paid with credit card I am not required to report the 10000 if I understand you right
Thanks,
Hi Diana,
since you paid on Paypal, you do not need to issue a 1099MISC.
If I own a small business and paid someone to help me with the blog and I used paypal to pay her, do I need to provide the 1099-MISC for her? or paypal does that? This is the first time I paid someone so I’m a bit confused with everything I’ve read about it. Thanks in advance
Hi Vinh,
I’m sorry but I’m not a lawyer and that sounds like a legal issue. In some states, you don’t give back the deposit, but in some places I’m pretty sure you do. You’d better get an attorney to help you out. Sorry.
Hi Cynthia,
I’m guessing that the agency that will be providing assistance to your tenants needs the W9.
I’m okay with that. What I don’t want you to do is give those deadbeats your social security number. Apply for an EIN number to protect yourself (it’s free, and easy) and give them that, not your social security number.
I would also (since I’m a suspicious nag) request that you give the W9 directly to the agency requesting the W9. That puts you in contact with the folks who will actually pay the rent. Also. if your tenants are being deadbeats who are yanking your chain–well you’ll know a little sooner now won’t you?
hi! i have a nails salon businesses want to sell it 32 thousand then ppl to buy it then they give me money deposit 2000$ but it over then week they don’t want to buy the shop anymore so i have to give them all the money deposit ? the nails salon in buffalo New York ……thank you so much !!! they have a recipe 2000$ but don’t write anything about give back if don’t buy the shop…
How kind of you to share your insights. I have a house that I am renting out to tenants that have consistently late with rent. I have never charged them for the lateness but it is coming more frequently and for longer periods of time. I inquired about last month’s rent and my tenant replied that he has applied for assistance (no specifics) and that (they) he require me to fill out a W-9 form. Does this make sense? I should warn you that I live in CA……
Hi Margaret,
I’m not understanding why you would need an EIN to move some furniture. Perhaps they mean that your mother’s estate needs an EIN? Also, as an expat, you should have a social security number which is a US identification number. I’m sorry, this is a bit confusing to me.
Hi Dawn,
I agree with you. You shouldn’t have to issue a 1099 for a refund of a security deposit. What box would you put the money in? It’s not rent. It’s not non-employee compensation. I suppose they could say “other” but that’s not income to the person you’re returning the money too.
Hi Joan,
Thanks for posting this question. I actually get it all the time talking to people in my office but I don’t think I’ve actually written about it before.
Here’s an example of the way it should work:
“Abby” hires you to rent her house out and manage the property.
You rent the house to “Betty” for $1000 a month.
Betty pay $1,000 a month to Joan. Joan pays $920 a month to Abby ($1000 less an 8% commission.) Of course, you’ll withhold whatever you take out for your commission and whatever other expenses you withhold for but this is just an example.
Joan will claim $12,000 in income for the rent — because Betty paid the money to Joan.
But Joan will also show $11,040 paid to Abby because that’s what was paid to her. So Joan’s net will be $960 –the commissions that she actually earned.
Why do you want to show the $12,000 when really you’re only making $960? It’s for the audit trail. If the IRS decided to audit you, they’d pull your bank statements. The first thing they’d see is $12,000 of revenue going in and you only reporting $960. Also, you’re issuing 1099s for $11,040–so if you only reported $960 of income–how could you afford to pay $11,040 in 1099 rental income?
You see–it would raise a red flag that you don’t need. Even if at the end of the day, you had reported all of your “real” income–because of the other things, you’d look suspicious to the IRS–and you don’t want that.
I hope that makes sense. Do report all the income–and make sure you show it going out as well.
Hi Jan,
I own a property management company that receives rent and then passes it through to the owners of the property, less commission. I issue the property owners 1099s for the gross amounts that we pay to the owners. Do I have to show the rents my company receives as revenue on my tax return? It is basically a pass through transaction. Thanks so much for your help!
Apologize if this question has been answered already but am having difficulty with a W9 and 1099 issue. I am a property manager for commercial properties and have been asked to get a W9 from a tenant who has moved out so we can process and send their security deposit refund to them. I don’t believe the return of a security deposit, held in a separate account that was never recognized as income to the landlord would be something we would issue a 1099 for to the former tenant. Am I correct in pushing back as to why we need this from the tenant?
I am an expat whose lived offshore for 25 years. My mother died and I want to move some heirloom furniture for my children. I’m told I need an ein. Should I do this? Will it increase my profile?
Hi Jan,
Thank you so much for answering the question and giving so much information. Really did not figure out how difficult/complex of a question it was. For me it was a relatively OK or not OK answer. From your answers, there seems to be a lot of other issues that need to be considered.
Just wanted to have confirmation : from my understanding in your answer, an illegal alien CAN get a TIN# ? Always thought that you needed to have a green card/resident alien/or visa to work in the US? why could a TIN # be issued in this case ?
I am sure these answers will help many other people that have run in similar situations.
By the way, your blog is exceptional. Great questions and so much detailed information..
Hello Jean,
I’m thinking you don’t realize what a difficult question you have just asked. Or, maybe you do which is why you posted it on a fairly anonymous web forum because you know what a sticky question it is.
To be honest, I was going to delete you post and avoid it altogether. But I think there’s probably a lot of people who have your same question and just don’t have the guts to ask. I figure you deserve a real answer.
It looks to me like your guy is an illegal alien–which I’m figuring you’ve already guessed. That’s why he has no social or ITIN. He wants you to issue the 1099 to his girlfriend.
Option 1: walk away from the situation and hire someone else. As a former landlord, I understand how difficult it is to find someone who does great work at a great price that you trust. But you need to remember that this is an option.
Option 2: When you have a contract laborer who refuses to give you his social or ITIN number, the IRS expects you to withhold 28% of the payment to the contractor as income tax withholding. You would have to file a form 945 in addition to your 1096 and 1099s. Here’s a link: http://www.irs.gov/pub/irs-pdf/f945.pdf. So, fr every $100 you would owe your guy, you’d only give him $72 and you’d put away $28 to give to the IRS.
Option 3: you receive a W9 from the girl friend and issue the 1099 to her. This is more problematic–I’m not a lawyer, but it’s looking like tax fraud and you’d be a knowing participant. Now, maybe not. The girlfriend could set up an LLC and as an LLC you could hire her company and she could hire this guy to do the contract labor for you. And she could be responsible for withholding the 28%, etc. etc. I’m betting it ain’t going to happen this way, but–it’s possible. But that’s the only way you should consider issuing the 1099 to her. She sets up a business and you hire her company to do the work.
Let’s go back and look at option 2 again for a minute. The reason you have to withhold the 28% income tax is because he will not give you an ITIN number. He says he doesn’t have one. Fine–but–he can get one. Even if he is an illegal alien, he can get an ITIN number when he files a tax return.
I know this sounds crazy, but the IRS would rather have illegal aliens paying taxes than reporting them to NSA.
Since he has no ITIN–that’s telling me he’s not filing his taxes–which is why the IRS is doing the 28% withholding rate for people who won’t give their ID numbers to their employers–for the folks who aren’t filing.
Everybody else who is bidding on your contract labor has to pay their income taxes–so that could be why your guy is so inexpensive. Once you start withholdiing the 28%, his billing may increase.
One more thing about option 3: Let’s say you ignore my advice and you go with option 3 and pay the girlfriend and 1099 her instead. Let’s say everything is fine, you don’t get caught, all is good etc. — then, one day he and the girlfriend break up. She goes off and gets married to some other guy and suddenly she realizes that she really doesn’t want a bunch of self employment income from her old boyfriend on her new husband’s income tax return. She files a report with the IRS–that’s not her money, she’s never worked for you, etc. Now you’re being audited and because she never has worked for you you lose all of the tax deductions from this work, etc.
Now, I’ve just talked about tax stuff. There’s other issues too that are out of my league, but I’m going to give you a link to a legal site just to give you a clue: http://www.nolo.com/legal-encyclopedia/legal-pitfalls-hiring-undocumented-immigrants.html
I’m not going to tell you what to do, I just hope I’ve given you enough information to make an informed decision.
Hi Jan,
I am a landlord wit a couple of rental homes and had a situation come up. I found a great guy who is doing great work at a great price (tiling, woodwork…), but he did not want to fill out a W9 (has no SS# and no Tax id#). So he asked me if it is ok to have his girl friend fill out the W9 (in her name) and I write the check in her name ? (eventhough he would be doing the work). Is this OK ? I told him I will be sending a 1099 next year to his girlfriend. He is fine with it.
Thanks
Dear Anonymous,
It is my professional opinion that your landlord is a pain in the ass.
Off course you are right. and you’ve got five experts (six if you count me) saying you’re in the right.
Everybody gets 1099s–you include the sales tax, she writes it off. It’s as easy as that. If she’s not paying it, well that’s her problem, not yours.
What’s she going to accuse you of? Filing correct paperwork? You’ve probably heard that old saying about people who live in glass houses shouldn’t throw stones. Well you landlord is what they’re talking about.
I many comments and emails from people who have “reported” cases to the IRS that haven’t been followed up on. Here’s the thing–the IRS gets lots of those notices, but they will only even consider ones that have been filed properly first. And second, then there has to be some compelling reason for them to follow through and actually audit someone. So, I’m thinking the chances of you actually being audited because of her are slim to none.
But, let’s say that I’m wrong. I’m thinking that your books are probably in good order anyway so I wouldn’t worry about that either.
Never be afraid to do the right thing.
3 accountants and 2 members of the IRS Have all confirmed to me that I must include sales tax in box 1 of my 1099-MISC to the landlord of my commercially leased office space since the tax is listed on my lease as part of my rent payment. My landlord has been extremely combatant with me claiming to my accountant that she is a CPA (which she is not) and demanding I remove the sales tax which I have been told not to do by 5 different professionals. They seem to think she may not have claimed my income which is why she is giving me such a hard time. She has now said that she will take whatever paperwork I give her and will be requesting the IRS audit me. She has also complained that I included the payment she automatically deducted on 12/31/13 for 1/2014 rent. I have been informed by these same 5 people that since I am on the cash method of accounting, I MUST report monies I spent in the year that I spent them, including this rent prepayment. My landlord is fighting me on this also arguing that I cannot deduct this until I have used it. To which I have been trying to explain to her that I am NOT deducting it as an expense until 2015 after I have used it, but I am REPORTING it as income she received from me. Can you please confirm who is right in this matter and if there is any recourse I can take from having her falsely accuse me to the IRS and creating an audit on my record if in fact she does request it and in the event that they DO actually audit me? Please let me know as soon as possible…I will be contacting a tax attorney tomorrow to give me more information. Thank you.
Hi PJ,
Keep good records. Copies of cancelled checks, or signed receipts. Things like that. My lawn guy that I have now sends me a statement, but none of the lawn guys I ever used before ever did that. If you pay in cash, make sure you get receipts from the folks you paid. Otherwise, cancelled checks are great.
Hi Mina,
I have several rentals…. I have used a few different guys to do lawn care and cleaning over the year. I have paid them cash, and the amounts have been well under 600 dollars for each of them. The question is… What info do I have to keep for IRS if I deduct the labor? No 1099’s were issued, since the amounts were small, but I want to make sure I don’t get in trouble for not having the right records.
Hi Mina,
Thank you for asking such a great question! I see this all the time.
First–you have 3 contract jobs–are they related? For example, what do you do? Let’s say you design websites. All of the jobs were for website design–then yup–definitely combine them.
But what if the jobs are totally unrelated? Maybe one 1099 is for web design and another is for your other career as a professional race car driver. Sort of unrelated fields. In that case, I’d make two separate schedule Cs for two completely different businesses.
But if you can possibly link the w2’s together, I like to see them on the same Schedule C because I agree with you, I like combining the expenses.
Hi, I have a question in regards to independent contractor .
I worked with 3 different company as a independent contractor like below.
A company : made around $600
B company : made $0 but a lot of expenses
C company : made around $2500
when i file the taxes, is it possible to combine ABC together? because i would like to deduct B’s expenses from A and C’ income.
Hi Trent,
Makes your head spin doesn’t it? But I think you’ve got the gist of this.
1. You buy product–no 1099.
2. The painter that paints cabinets on the job? Yes, definitely.
3. Aha, the trick question–the answer is it could be both, because you’re paying for the paint and the service of painting the cabinet. Issue a 1099 for the entire amount you pay–the contractor will then record the cost of the paint as an expense to his business. (You aren’t responsible for having to figure how much was for what.)
I’m a general contractor and am wondering who i 1099 and who i don’t need to.
1) a supplier that provides me with material or product. Ex. Cabinets? (No, Correct?)
2} a painter that paints cabinets on the job? (i assume so)
3) if i bring unpainted cabinets to a shop and pick up a painted cabinet, is the paint a product or service?
Hi Carol,
Technically, the small business should ask your friend to fill out a W9. If they do, I recommend that your friend get an EIN number and not give out his social security number.
If they don’t ask him for a W9–that’s their problem, not your friends. But he shouldn’t be surprised if the come crying to him next April asking him for one.
My friend has a small building he rents to a small business, should that business be asking for a w-9 ?
Hi Nancy V,
You received a 1099 from your property management company and you want to know if you need to send them one too. My gut reaction is NO, and here’s why:
The property management company is collecting the tenant rent, that money goes into their bank account. They send you the income less their fees. For example, let’s say the rent is $1000 a month and their fee is 10%. They send you a check for $900. So, they should be sending you a 1099 saying they sent you $900. In that case, you don’t need to issue them a 1099.
On the other hand, if they’re issuing you a 1099MISC that says $1000 — well that’s different, and you’re going to want to send them a 1099 showing that you paid them $100.
Why all the 1099s? It’s all tied into the Obamacare. Increased income reporting is a side effect of the health care program. It also helps with the whole “audit trail” for the IRS. So, the property management company really does need to issue you the 1099.
Also, you don’t have to issue the property management company a 1099 if they are a corporation. You would only do that if they were a small business or individual.
When you file your tax return, you do not have to send the 1099 in with the return. It’s not like a W2–the W2 proves that you paid tax through your withholding. A 1099 usually has no withholding so it’s not necessary to mail it in.
The IRS does get that information though, so make sure that you do report it on your tax return.
Hi Diana S.
As far as the IRS is concerned, you are self-employed. If you get a 1099, it would show the income in box 7. That’s okay, you’re going to write off your mileage, the cost of your equipment and any other expenses related to the job, but you will pay self employment tax and put the income on a Schedule C.
If they give you a 1099 and put the money in box 3–then you can include it as hobby income on line 21 but you won’t be able to write off the expenses very easily. Here’s more information on hobbies: http://robergtaxsolutions.com/2010/10/business-or-hobby/
I received a 1099-MISC from the Property Management company that takes care of my rental property. Am I responsible for submitting a 1099-MISC to them as well? Do I submit 1099-MISC along with schedule E and my 1040 tax form??
Thank you
Nancy
Great line of questions and answers! Now here is mine: I am retired and draw a monthly retirement benefit, with taxes withheld automatically. Additonally, I work a part-time job for a medical facility (10 hrs a week), and also have taxes withheld automatically. I have one rental house which brings in some income, and some deductions. Last year (2012), I ocassionally helped out a friend who is in the real estate business. I drove by properties and took an exterior photo of the places. She paid me a flat hourly rate. I provided my own equipment, transportation, etc. For the whole year, I did less than 70 hours of work for her (a little over $1000). I’m not her employee, and I don’t really feel like I am self-employed. This seems like a sporatic, temporary situation that brought in income that I am trying to report. On a form 1099 (which I never got) would this be a box 3 or a box 7 entry? And on my 1040 would this be a line 21 “other income”, or would it be reported on the self employment form? I want to do what is right, but this was hardly what would be considered my business or my main source of income, subject to self employment taxes. Right, or wrong? Thank you in advance for your help!
Hi Charlene,
The person who keeps the 10% and issues you a 1099 for the rest–well I guess that is right. Then you just don’t claim the 10% that you pay her as an expense. And you only report the money she lists on the 1099 as your rental income.
My only problem with that is it will look like your rents are a little low. This is just anal retentive accountant me here. I’m paranoid because I worked on an audit where the IRS said–Gee–why are your rents so low? But, technically, she’s issuing a 1099 for what she’s paid you so it’s good. Just keep some documentation about he keeping a 10% fee just in case it ever comes up. (It won’t, I’m just paranoid but keep it anyway.)
You should issue a 1099 to the small business that manages the property. That’s the right thing to do.
Hi Debra,
Lots of questions. Let’s roll.
1. If the government isn’t giving your 1099s, makes you wonder doesn’t it? But the bottom line is, as long as you are reporting your income properly, it’s not your fault if they’re not.
2. The security deposit isn’t a payment (per se) so it does not go on the 1099.
3. You do not have to issue a 1099 when you purchase from a corporation.
Bonus: you didn’t ask, but I’m adding this. If you buy something using a credit or debit card: you don’t have to issue a 1099 for that either.
Hi Kathleen,
Let me make sure I understand. An athletic club rents space from a church. Does the athletic club need to issue a 1099 to the church for the rent?
I don’t know. Sorry, I looked at the instructions and I looked in my handy dandy book–it doesn’t specifically mention churches. So, I’m going to go out on a limb and say, “Yes.” I could be wrong, but it’s erring on the side of caution.
Hi Ryan,
should a property manager issue 1099s to property owners? I say yes and here’s why. Let’s say you lease houses for Joe Blow. He owns 3 houses and they tenants all pay you $1000 a month for rent. You send the money to Joe and he pays you a fee for taking care of things. You are not earning $3000 a month on those houses are you. But if the IRS were to look at your bank account, they’d be asking about that money.
By issuing a 1099–it shows that you sent that money to Joe and your backside is covered.
So the question really is–who are the checks made out to? If they make the checks out to Joe himself–not your problem you only picked them up and delivered the checks. But if the checks are payable to you and you’re supposed to then pay Joe– issue a 1099.
Hi Jan,
I have a vacation rental property. I have two parties working for me.
One party, an individual, handles booking and collects rents. This individual takes 10% of the rents collected. I receive 1099 from this individual for the amount I actually received. Is this right way for issuing or receiving 1099?
Another party, a small business, manages the property. I pay them every quarter, which includes labour (cleaning, fixing, etc.), monthly management fee, and supplies they purchase for me. Should I issue 1099 to this small business?
Thanks.
Charlene
Jan,
This has been an extremely helpful site! We have a small marine repair business and are incorporated. I have several 1099 related questions:
1. We do a lot of service for the various government agencies (marine patrol, Dept. of Fish and Game etc.) but have never received a 1099, should we? We also do service work for a local boat rental business but haven’t received a 1099 from them either; should we? If we don’t receive them but we still declare the income, is there any penalty for us?
2. Do I need to put the security deposit paid to our landlord on his 1099?
3. We buy parts from several large vendors, all of whom are incorporated. Do I need to 1099 them for these parts/products?
Thank you!!
Debi S.
Sorry Jan…let me ask with full sentences (lol). My client’s landlord is a church…Do we have to issue 1099 for rent to a church?
My client’s (who is a athletic club) is a church. I cannot come up with any information of you have to issue a 1099 TO A CHURCH for rents? What do you think?
These are long-term rentals, if that makes a difference.
Hey there, great informative site! I hope I’m not asking a question you’ve already answered (I only read about the first half of the posts), but I can’t seem to find a clear-cut answer to my question. As a property manager, am I required to issue 1099’s to the individual owners of the properties I rent out on their behalf?
Gee Lynne,
Why wouldn’t you want a 1099 for the work that you do? Aren’t you reporting that income anyway?
If your employer is legitimate he should be issuing a 1099. He should have you prepare a W9 form to get your social security number.
If he doesn’t give you a 1099 for the work he pays you for, he could get into trouble.
Hey James,
you used pounds instead of dollars. I do American taxes. Sorry, but I’m not the best source for you.
Hi Kathy,
You put in rents the total rents that you received. Let’s say that you received $500 in rent. $300 was the actual rent, $100 in taxes and $100 for utilities. You’d still put $500 as the rent received. The owner will be writing off the utilities and taxes, you’re just verifying what was paid.
And yes, you report what was actually paid even in the accrual properties.
Very simple question, I worked for a friend, cleaning his office for two years. Actually me and another individual..I don’t have a business and he knew this from the beginning… He gives me a 1099. Is he permitted to do this with out advising me? And is there something he should of given me to fill out prior to hitting me with a 1099… Or can he just give me the 1099 without any warning?
my land lord refused to let me sell my business,the buyers refs were good but the landlord was not happy.we had been trying to sell for over a year. we refused to pay anymore rent.he changed the locks after a month.he will not return our propert or our £2000 deposit.we have learned he has been renting out the property again with our equipment being used and charging a premium.
Jan, questions about property management companies and their commercial property owners. I get it that as a property management company we are now supposed to 1099-Misc to the property owner ( in the Rents box) for the rents collected on their behalf. My first question is, what do we include in rents to report to the property owner? Base rent; pro-rata portion of taxes, insurance, and common area expenses; late charges on rent; NSF fees; reimbursed suite utilities; reimbursed suite maintenance charges; all of these or only some of these?
Second question, for accrual based properties, regardless of the rental category, we’d report the rental amounts tenants actually paid, rather than the rental amounts reflected on the financial reports?
Thanks for any insight you can give,
Kathy