The good news: You made it through December! The holiday madness is over and all your efforts to get your year-end financials finished have paid off. Now you can breathe a bit easier in the new year.
The bad news: It’s 1099 time, and if you recall, the 2018 deadlines to report 2017 payments have changed, some shifting from February to Jan. 31. The IRS requires 1099s to be sent to vendors AND submitted to the IRS by this deadline. Did you order your forms? Do you even remember how to do this?
The great news: Real estate property management software including MRI and Yardi can make this pesky task a breeze. What used to be a laborious chore of combing through a year’s worth of vendor records—a process that could take days if not a week or more—real estate property management and investment management firms utilizing database-driven software like MRI or Yardi can now do it in a snap.
For these lucky souls, the 1099 process is distilled into just a few easy steps:
- Update your software with your vendor’s latest update for 1099 processing. SaaS clients (on both MRI and Yardi) this has already been handled for you. For self-hosted clients, please contact your software representative to get this update completed.
- Verify your vendor records. Ensure that the appropriate vendors are identified and designated to receive 1099s, and their files contain the correct tax ID numbers and addresses.
- Ensure that your general ledger accounts are identified correctly for 1099 purposes.
- Verify your payor records. In MRI, check that your 1099 Payors Table has been updated. For Yardi users, ensure that Management Company, Owner, or Bank account vendor records are updated (depending on who will issue the forms.)
- Extract the data and verify its contents.
- Print the forms.
- Electronically submit the forms to the IRS (Submitter tax id number and Transmitter control code required)
Et voilà! No sweat, no panic, no wasted time. Happy New Year, indeed.
(Please note that if you just implemented MRI or Yardi in 2016, you may have to handle 1099s a little differently. Make sure to discuss this with your software implementation team prior to finalizing.)