It's tax season, which means that it's time to send out your vendors' 1099s. But first, you need to gather their W-9 tax forms. Even if you already have done this, this article will ensure you keep them organized and easily accessible.
The W-9 tax form is a single-page document entitled Request for Taxpayer Information and Certification. Its requirements are basic, disclosing a vendor's identifying tax information. This includes the legal name, address, and social security number of individuals who don't have a registered business entity. Individuals with a registered business must also provide their business name and EIN. One ID number is all that's required to ensure the IRS has the right information.
Any non-employee individual who is likely to do more than $600 worth of work for you before year's end should fill out a W-9 form. If a vendor fails to submit a W-9 to you, you are required by law to withhold 28% of their earnings for taxes. W-9 is only for individuals; other businesses working for you do not need to submit this form.
There are specific scenarios in the real estate industry that determine when and how these forms are used. If you are a landlord, tenant, or property management company, here are a few guidelines to consider:
Landlords: All of your tenants must provide you with their Form W-9. You will then receive a Form 1099 form reporting the income you received. If you use a property manager, you will need to file a Form 1099 for their service and provide them with a W-9. The property management company is responsible for issuing 1099s to all vendors they have hired to maintain your property.
Tenants: As a tenant, you should always request a Form W-9 from your landlord before paying them. If the W-9 shows that your landlord is not taxed as a corporation, you must file Form 1099.
Property Managers: Property managers must obtain a Form W-9 from the landlord and file a Form 1099 to report paid rent during the tax year. Property managers must do the same for all vendors not taxed as corporations that were hired and paid over $600 over the course of the year.
To help you get started, we've included a link to the official W-9 form here from the IRS website.
We've also included some detailed instructions below that outline how to manage your W-9s, once you've received them, with Hive.
Step 1: Open Hive and Select a Property
Step 2: Select the Vendors Tab
Step 3: Add Vendor
Step 4: Upload Form W-9
Managing your vendors can be a lot of work. Thankfully, there are great property management solutions to help you keep track of everything. Hive Properties is the easiest, simplest, and fastest way to manage your property. Whether you're a Landlord, Property Manager, or Broker, it requires a lot of time and energy to keep everyone you work with on the same page. Hive Properties ensures that everyone has access to the information they need to perform their role efficiently.
To learn more about Hive, visit us at crehive.com.