State and Federal 1099 form deadlines are approaching quickly!
Let’s take a look at the requirements, deadlines, and tools available to help you meet the 1099-MISC and 1099-NEC filing obligation forms in 2023 (for the 2022 reporting season).
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 on a 1099-MISC form exclusively. But starting last year, the IRS 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.
Federal 1099-MISC Deadlines
E-file: March 31, 2023
Recipient: January 31, 2023
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-NEC Deadlines
E-file: January 31, 2023
Recipient: January 31, 2023
What Happens if I Miss the Deadline?
The IRS has set the penalties for late filing from $50-$290 per return depending on how late the form is submitted. Intentional disregard (non-filing) is $580 per return.
Want more information about the previous form changes and requirements?
Learn more here: 1099 MISC and 1099 NEC Changes and Requirements
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.
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 electronically file your 1099 tax forms, 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:
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 offers a helpful article and video with filing information here:
Reminder: Rentec Direct clients, remember to take advantage of this year’s discount code.
Tip: Process your 1099s at least two days early to avoid Nelco Solutions added surcharge for forms processed the day before and the day of the due date.
Reminder: As you work towards meeting your tax reporting goals, it’s important to check your state and federal tax requirements and speak with your tax professional.
Lastly, as you wrap up your fiscal year, you’ve got much on your plate. As you prepare to file your 1099s and other tax reporting obligations, here are a few additional resources to help get a jump start on all those bookkeeping tasks.
- Bookkeeping Reminders and End of Year Questions to Ask Your Accountant
- Tax Tips for Rental Properties | Rental Income and Deductions for Landlords
- Rental Property Accounting Tips and Tricks for Landlords and Property Managers
This updated article originally posted 1/6/2021 and has been updated for 2023 (2022 reporting season) and is to help understand the 1099 changes and does not constitute legal advice. Please consult with your tax professional regarding your 1099 obligations and deadlines.