It’s December 2016 and this time of year is typically busy for everyone because we’re planning for holiday parties, Christmas, New Years and time off, while tax season while tax season is something that we put off until January when tax season should be something that we prepare for now, just to avoid the last minute rush of preparing the forms that will need to be files for tax season later.
What Forms Do You Need For Tax Season?
1099-MISC forms are used to report a variety of income to the IRS. Generally, contractors and freelancers receive them from any company where they’ve been earning regular income over the previous year.
In property management, they are used to report rent earned from a leased property, as well as income from contracted work. A form must be sent to each landlord and vendor that has earned $600 or more over the course of the tax year.
For example, do you work with one plumber on a regular basis? They need one. How about the college student who mows the lawns at your properties over the summer? They need one, too.
1099-MISC forms are generally expected to be postmarked by January 31st of the upcoming tax year, per IRS deadlines; and in the past, filing with the IRS could be done at a later date. But 2017 is different: You’ll be required to send 1099-MISC recipient copies and file with the IRS by January 31, 2017.
If you plan to file more than 250 1099-MISC forms with the IRS, you must file electronically. In accordance with the Government Paperwork Elimination Act of 2003, they prefer that you eFile regardless of the number.
The IRS recommends keeping copies of filed 1099-MISC forms, or having the ability to reconstruct them, for at least 3 years following the due date of the returns. Retain copies of them for at least 4 years if backup withholding was imposed.
If you don’t file 1099-MISC forms at all, penalties range from $50 to $500 per form. Even worse, deductions tied to the income can be disallowed, too. This means that if you don’t file your 1099-MISC forms, your landlords won’t be able to claim the property expenses as tax deductions.
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For the best property management service in the Central Valley contact RPM Central Valley today by calling us at (209) 572-2222 or click here to connect with us online.