You'll be glad to know that Texas has one of the lowest tax burdens in the United States.
Do you own one or more rental properties? Efficiently handling tax season is crucial for maintaining smooth operations and ensuring compliance.
Read on to get a better grip on your tax statements and 1099s. That way, you can improve your property management practices and take charge of your financial records.
Taking Stock of Property Owner Taxes
As a property manager, it's essential to understand the tax obligations that come with owning rental properties.
In Dallas, TX, property owners must pay property taxes to the local government, which funds public services such as schools, roads, and emergency services. These taxes are often assessed year-by-year and are based on the property's value.
Stay True to Rental Income Reporting
Property managers must always report the rental income generated from the properties they manage. This income is subject to federal income tax, and accurate reporting is necessary to follow IRS regulations to a T.
Property managers must also report other types of income in addition to rent payments. Examples include security deposits forfeited by tenants or late fees.
Finding One's Way Around 1099 Requirements
Are you familiar with the 1099 form? This form is used to report different types of income, including rental income. As a property manager, you must send 1099 forms to landlords to document their rental income.
In Dallas, Texas, property managers send 1099-MISC forms to landlords who receive $600 or more in rental income during the tax year. The deadline for sending these forms to landlords is often at the end of January. The deadline for filing them with the IRS is the end of February if filed by paper or March if filed online.
The Real Importance of Financial Record-Keeping
Property managers should maintain detailed records of rental income, property-related expenses, repairs, and maintenance work. The same is true for any other financial transactions throughout the year.
Using property management software can streamline this process.
The Most Precise Real Estate Tax Documentation
Real estate tax documentation encompasses all the necessary paperwork and records required to comply with tax regulations. As a property manager, you must ensure that all real estate tax documentation is accurate, complete, and filed on time.
This includes maintaining records of property taxes paid, rental income earned, expenses incurred, and 1099 forms issued. Proper documentation helps skirt disputes with the IRS and offers a clearer financial picture for property owners.
Don't forget that having well-organized real estate tax documentation can facilitate audits. It could also make it easier to respond to any questions from tax authorities.
It's Time to Grab Tax Statements and 1099s by the Horns
You shouldn't feel intimidated by tax statements and 1099s any longer. Instead, you can handle every tax season with absolute ease.
This and other tasks become even easier when you team up with Evernest. Our dedicated team manages almost 15,000 properties in the great state of Texas and elsewhere.
Touch base with the Evernest team today for essential property management solutions in Dallas.
