State and Federal 1099 form deadlines are approaching quickly! Whether you are a landlord, real estate investor, or property manager, be sure you understand the new changes and the deadlines for the 1099 filing requirements for the upcoming tax year.
Before the bustle of the holiday season gets underway, now is the time to ensure you have all of your 1099 prep completed and you fully understand how to file your 1099 forms according to this season’s new requirements.
The 1099 filing process will change for many businesses. The e-file threshold for 1099 forms has been reduced. Even if you were previously not required to electronically file your 1099 forms, this year, you may need to e-file.
IRS 1099 Form Requirements
Who Needs to Submit 1099s to the IRS?
Individuals are required to file a 1099 form with the IRS for anyone you paid more than $600 or more to in rents or services performed for a trade or business by people not treated as employees.
Reminder: A 1099 form does not need to be filed when the amount paid is under $600, is made to a corporation, or payment is for the purchase of goods not services.
What Typical Forms are Used in Property Management?
Previously, the $600 or more in rent collected and paid to owners and money paid to service providers and vendors would be documented exclusively on a 1099-MISC form. Since then, the IRS has separated out the reporting by type between the 1099-MISC and the revived 1099-NEC form.
- 1099-MISC Form: used to document payments of over $600 for rent paid to owners as well as attorney fees paid for rental business activities such as evictions.
- 1099-NEC Form: designated to document all other payments of over $600 for services performed related to the rental business. Use this form to report nonemployee compensation previously reported on box 7 of the 1099-MISC.
Federal 1099-MISC Deadlines
- E-file: April 1st, 2024
- Paper: February 28, 2024
- Recipient: January 31, 2024
Federal 1099-NEC Deadlines
- E-file: January 31, 2024
- Paper: January 31, 2024
- Recipient: January 31, 2024
Will I need to e-file as a property manager or landlord?
On February 23, 2023, the IRS released final regulations that lowers the e-file threshold for certain information returns from 250 returns to 10 returns for calendar year 2023 (filed in 2024). This regulation includes the total for all aggregated forms filed.
The e-file threshold for 1099 forms has been reduced. Even if you were previously not required to electronically file your 1099 forms, this year, you may need to e-file. Electronic e-filing is fast and easy and helps you avoid missing important deadlines. If you plan on submitting paper versions of your required 1099 forms for backup holdings, check with the IRS for those specific deadlines may be different than the electronic filing deadlines.
What Happens if I Miss the Deadline?
The IRS has set the penalties for late filing from $60-$310 per return depending on how late the form is submitted. Intentional disregard (non-filing) is $630 per return.
Filing 1099s With Your State
Not only are business owners and individuals required to file these important tax forms with the IRS, but your state might also have state 1099 filing requirements as well.
If your state requires you to file a 1099 tax form, make sure to complete this task at both the state and federal level. It is important to note that your state might have different deadlines than the federal deadline.
Reminder: when you check your state requirements for filing 1099 forms, look for:
- Due date to file
- Requirements to file electronically
- 1099 state filing requirements for using the appropriate forms
- 1099-NEC with information in Box 7 vs. no information in Box 7
- Dollar amount paid to meet the requirement to file 1099-MISC
- For example, the federal requirement is $600 or more, but some states don’t require you to file a 1099 unless you paid out $1,500 or more.
State 1099 Deadlines
State 1099 deadlines and requirements vary by state. The good news is that if you use Rentec Direct property management software to file your 1099 tax forms electronically, you can file with both the IRS and your state tax agency simultaneously through our partnership with Nelco tax professionals.
If you don’t use an integrated property management software platform, how can you find information about your state 1099 form filing information and deadlines?
Whether you use a less robust software, have your accountant process the forms, or manually create forms yourself, Nelco Solutions developed an easy-to-use tool to help you determine your state filing requirements for the reporting year: 1099 State Filing Deadlines Lookup Tool
File Soon and Avoid Penalties and Surcharges
Filing is easy using the tools provided by Rentec Direct and Nelco Solutions. Nelco Solutions and Rentec Direct offered a live training with helpful filing information. If you missed it, you can find a recording and additional helpful filing information here: How to File Your 1099 Tax Forms With Nelco | Live Training
When do you have to have the 1099 tax forms to Nelco to get them filed?
8:00 PM Eastern time on January 31st. As long as you get to that checkout screen in Nelco’s system and see the screen that says Congratulations by 8:00 PM Eastern Time on January 31st. Nelco will ensure that those forms are printed and mailed to the recipients and efiled to the IRS.
Reminder: Nelco is offering all Rentec Direct clients one free filing with the code: RENTEC23