The 411 on 1099’s
by: Rebecca Bacon
It’s that time of year again! Utopia Management has published and released its 2014 1099’s. What is a 1099, you ask? It is a Federal tax form the government requires a “payer” (Utopia) to send to non-employee paid individuals or entities during a calendar year. It can report income such as interest income, income for work performed as a non-employee (individual, partnership, contractor, etc), or in our case rental income. Here are some frequently answered questions regarding 1099’s:
Why haven’t I received my 1099?
• It may not have gone out yet! Generally, the IRS requires that the 1099’s be mailed by January 31st, but because this date falls on a Saturday this year, the deadline has been extended to Monday, February 2nd. Generally speaking, if you are asking why you haven’t received a 1099 (or other tax form) before the first week of February, it might not have been published mailed yet.
• Have you moved or changed your mailing addresses in the past year? 1099’s are mailed to the address we have on file for our owners (and vendors). If we are not aware of your recent change, we have mailed your form to an old address and will need to resend the 1099 to the correct address.
• Tax forms, like all other mail processed/delivered by the US Postal Service can be lost in the mail. If you have not received your form by the second week in February, you will probably need to request that it be reissued.
What information is on my 1099?
• The 1099 form for rental property owners will state the gross rental income collected by your property management company on your behalf for the calendar year indicated in the top right corner of the form. The IRS requires that we report the total rent collected – not the net amount sent to the owner after expenses are paid. To maximize the tax benefits of your rental property, please consult with your tax professional on which rental property expenses can be deducted on your income taxes.
Is my tenant’s deposit considered income?
• No, the tenant deposit is not considered income, and is not included in the rental income total on your 1099. The deposit is technically a Liability because you will likely have to return all or a portion of it to the tenant when they move-out.
1099’s like taxes in general can be complicated and confusing. If the above doesn’t answer all of your 1099 questions, please feel free to contact us or your tax professional for further assistance. We wish our clients the best this tax season and always!