What Owners Should Know About 1099s and Tax Reporting for Long-Term Rentals

Beth Davis

All County Editor

What Owners Should Know About 1099s and Tax Reporting for Long-Term Rentals

Owning rental property can be a powerful wealth-building strategy—but when tax season arrives, many landlords find themselves confused by IRS reporting requirements, especially when it comes to 1099 forms. Understanding what must be reported, who receives a 1099, and how to stay compliant is critical to protecting your investment and avoiding costly penalties.

Here’s what every long-term rental owner should know about 1099s and tax reporting—and how working with a professional property management company like All County® can make the process far easier.

What Is a 1099 and Why Does It Matter?

A Form 1099-NEC is used to report payments made to non-employee service providers—such as contractors or vendors—who are paid $600 or more in a calendar year. For rental property owners, this commonly includes:

• Maintenance and repair vendors

• Landscapers

• Handymen

• Cleaning companies

• Independent contractors

If you pay these individuals or businesses directly, the IRS generally requires you to issue a 1099-NEC.

Failing to issue required 1099s can result in penalties, fines, and unwanted IRS scrutiny, even if the income itself was legitimate.

Who Is Responsible for Issuing 1099s?

This is one of the most misunderstood aspects of rental ownership.

• Self-managing owners are typically responsible for collecting W-9s, tracking payments, and issuing 1099s.

• Professionally managed properties often shift this responsibility to the property management company—but only if the manager pays vendors directly.

At All County®, we handle vendor payments through professional accounting systems, helping ensure accurate reporting and compliance while reducing the burden on property owners.

Common 1099 Mistakes Rental Owners Make

Many owners unintentionally make errors that can lead to problems later. Common mistakes include:

• Not collecting W-9 forms from vendors

• Forgetting to issue 1099s to qualifying contractors

• Issuing 1099s incorrectly (wrong entity, wrong amounts)

• Confusing repair expenses with capital improvements

• Poor recordkeeping throughout the year

These issues often arise when owners manage properties without professional systems or guidance.

What Rental Income Must Be Reported?

All rental income received must be reported on your tax return, including:

• Monthly rent payments

• Late fees

• Lease break fees

• Other tenant-paid charges

Even if rent is collected by a property manager, it is still reported as income to the owner. Accurate monthly statements and year-end summaries are essential for proper reporting.

Deductions and Expenses to Track

Good tax reporting isn’t just about income—it’s also about capturing legitimate deductions, such as:

• Property management fees

• Maintenance and repairs

• Advertising and leasing costs

• Insurance

• HOA dues

• Mortgage interest

• Depreciation

Professional management ensures these expenses are clearly categorized and documented, making tax preparation far smoother for you and your CPA.  For a complete list of allowable deductions visit www.IRS.gov.

Why Professional Property Management Makes Tax Time Easier

One of the often-overlooked benefits of hiring a professional property manager is clean, compliant financial reporting.

All County® has spent more than 35 years raising professional standards in the property management industry, providing owners with:

• Detailed monthly and annual financial statements

• Proper vendor payment tracking

• Support with 1099 compliance

• Organized records for CPAs and tax professionals

• Reduced risk of IRS errors and penalties

While All County® does not provide tax advice, our systems and processes are designed to make your accountant’s job—and your life—much easier. To find an All County near you visit www.Allcountyprop.com.

Final Thoughts: Protect Your Investment with Proper Reporting

Tax compliance is not optional, and mistakes can be costly. Whether you own one rental or a growing portfolio, understanding 1099 requirements and maintaining accurate records is essential.

Working with a professional property management company like All County® helps ensure your rental business is run with the same level of care, compliance, and professionalism as any other investment—so you can focus on building long-term wealth with confidence.

For a free quote visit www.Allcountyprop.com.

If you are interested in owning your own property management businsess – see how partnering with All County can help you acheive your business goals – visit www.AllCountyFranchise.com.