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Understanding Tax Statements and 1099s: A Guide for Landlords

Understanding Tax Statements and 1099s: A Guide for Landlords

Making a tax error is a common fear during tax season. If you incorrectly file your taxes, you are responsible for paying penalties from the IRS and correcting your forms.

To avoid these mistakes altogether, it's important for property managers in Houston, Texas to understand tax statements and 1099s. Knowing what you need to file ahead of time will help you prepare for tax day.

Keep reading to learn more.

Tax Statements and 1099s: What's New?

In 2021, the American Rescue Plan Act was signed by Congress. This new law addresses how property owners report their income.

Now, the IRS requires landlords to report income from non-employment channels if it exceeds $600. Previously, this income only had to be reported if the income exceeded $20,000.

It's important to avoid accounting mistakes so that you can accurately file your taxes. Failure to follow these regulations can lead to fines.

The type of 1099 form you'll need to file will depend on your rental income and how you pay non-employees. Let's go over the different tax statements and 1099s you may be required to file.

1099-K Form

If you receive rental income electronically, you'll file a 1099-K form. Transactions exceeding $600 via rent collection apps and digital payment services must be reported to the IRS.

If you hire a property management company, they will implement a tenant portal where renters can pay rent online. Doing so likely means you'll need to file this form during tax season.

1099-NEC Form

Non-employees, like independent repair and maintenance contractors, should fill out a 1099-NEC form. You can provide them with this form when you hire them and file it with your taxes.

Again, you'll only need to file this form if the payments exceed $600.


Property finances don't always come in digital forms. If you still accept cash or paper checks for rent, you'll need to file the 1099-MISC form. This form is for miscellaneous income sources only.

Additional Tax Statements for Landlords

You may already be familiar with certain tax forms when completing landlord taxes. Form 1040 is used by most taxpayers to file annual income. You can use the form to report rental expenses and income.

Accurate filing of this form helps landlords determine what rental property deductions they may qualify for.

If your business is legally a partnership or S Corp, you need to file Form 8825. This form is similar to Form 1040 but involves reporting income from real estate trusts, estates, and partnerships.

How Can a Property Manager Help?

A Houston, Texas property manager understands what it takes to run a successful rental property. This knowledge includes rental property accounting and tax filing.

Precision Realty & Management offers comprehensive financial reporting. We provide annual tax statements and 1099s to help you accurately report your income.

Since 1989, we've taken on the role of leaders in the industry. As active members of the NARPM, we know what it takes to help Houston landlords like you succeed.

Don't hesitate to reach out to our dedicated property management team. Contact us today for a free service quote.