Does Property Manager Needs W-9 for tax reporting?

Question

I have rental property income from one single family home.    I have always reported the rental income on Schedule E  ("Supplemental Income and Loss") form with the IRS and not schedule C because I hold title in  my own name, not in an LLC or S corporation.  I want to continue reporting the rental income on schedule E.  A new property manager I might hire sent me a W-9 with his sample management contract which he'd like me to sign.  I have 2 questions:

1) If I fill out the W-9 for them, will I still be able to report the income under schedule E and not schedule schedule C with the IRS?

2) If I want to be sure I get a 1099 from the new property manager at the end of the year with the rents received, should I   fill out the W-9 or  just give them a copy of my social security card?

Any replies would be appreciated!

Brandon Hall · Answer

@Tricia O'Brien property managers are required by law to issue 1099s to their landlord clients. In order to issue a 1099, they must have a Form W9 on file.

1. Yes you will still be able to report on Sch E.

2. You should not give a copy of your SS card as that will not have the information needed to issue a 1099. You must provide a Form W9.

Michael Plaks · Answer

@Tricia O'Brien

You must complete W9,  but before you do so - go on the IRS website and obtain a free EIN. This is a business tax ID that will replace your SSN. You do NOT want to give your SSN to anybody these days.

@Carl Fischer is only partially correct. The 1099 will not make a difference, but only if the property manager does it correctly: reporting it as "rents" in Box 1. Unfortunately, many property managers report income as Box 3 "other income" or, worse, Box 7 "nonemployee compensation." Then it's a problem. It's in your best interest to ensure in advance (verbally) that they will use Box 1.

Mora Clark · Answer

@Michael Plaks hahah oops. Thank you I’ll make sure I won’t use your name for the business  :D thank again for your input above sir.

Brad Larsen · Answer

Here is what has NOT been mentioned yet - we as property managers are required by law to withold funds if we do not get a completed W-9.

Every year we get a few sign ups where the owner does not have a TIN (Taxpayer Identification Number) when they begin services with us.  Telling us they have to double check with their CPA or whatever....  And every year we end up chasing investors down, usually a small handful, and threatening to withold rental income - PER THE IRS LAW!!!  No fun for us, we come off looking like the a-holes, but we have been audited for this and fined by the IRS.

Bottom line - Fill out your W9 form for your Property Manager and make sure all of the information is correct.  We then run that through tax1099.com to do a TIN match.

Good luck out there!

Carl Fischer · Answer

The W9 with your name and SS# will not make a difference on how you file.

Michael Plaks · Answer

@Mora Clark

If you want an answer - it's best to tag the right person. You tagged some other Michael  :)

You can only have one EIN as a sole proprietor. It is tied to your SSN in the IRS system, and you should use it for ALL businesses you operate, including freelancing and rentals. You will give it to your PM and to your bank. As a business name, you can use your own name or you can register multiple DBAs. Just don't use my name.

Dave K. · Answer

Thank you so much for this info.

Mora Clark · Answer

@Michael Blank Hi Michael, so I do have an EIN for my freelance work and work as a sole propietor so now I want to use that EIN in my W9 to my PM on my new rental property. Is it ok to do that? I open a new biz checking acct under that EIN as well for this rental. So my PM and my bank as for my business name, isn’t my business is just my name with this circumstance? Also, I bought the house with my SSN so the deed is under that SSN, will it be a problem using EIN in W9 and all other tax paper? Please enlighten me

Michael Plaks · Answer

Definitely yes. On the IRS website, no charge.

Does Property Manager Needs W-9 for tax reporting?

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