Tax season often raises questions for rental property owners—especially when it comes to 1099 forms and year-end income reporting.
For rental property owners, understanding how 1099s fit into your investment can help make tax preparation smoother and more efficient.
Below is an overview of what rental owners should know about 1099s, what to review when you receive one, and how year-end reporting supports the tax preparation process.
Important disclaimer: Stone Rent is a real estate property management company based in Mesa, Arizona. We are not tax representatives, and the information below is for general educational purposes only. Owners should always consult their CPA or tax professional regarding their specific tax situation.
What is a 1099 and why might a rental property owner receive one?
A 1099 is an IRS information form used to report certain types of income or payments during the calendar year. In rental real estate, 1099s may be issued because rental income and payments can flow through multiple parties, including tenants, property managers, owners, and service providers.
Rental property owners may encounter:
Form 1099-MISC, commonly associated with rental income and other miscellaneous payments
Form 1099-NEC, used to report payments made to non-employee service providers
Form 1099-K, used in certain third-party payment processing situations
Not every rental property owner will receive the same type of 1099, and receiving a 1099 does not automatically mean additional taxes are owed.
For official IRS guidance, owners can review instructions directly at:
https://www.irs.gov/instructions/i1099mec
Why your 1099 amount may not match your owner payouts
One of the most common questions during tax season is why a 1099 amount appears higher than what an owner remembers receiving.
In many cases, 1099 reporting reflects gross rental income collected, while owner distributions are net of operating expenses such as:
property management fees
maintenance and repair costs
vendor and contractor payments
leasing or administrative expenses
This difference is normal in rental property accounting. Your year-end owner statement provides the detailed breakdown that explains how rental income and expenses were applied throughout the year.
What to review when you receive your 1099
When your 1099 arrives, it’s important to review a few key items:
1. Owner information
Confirm that your legal name, address, and taxpayer identification number are accurate.
2. Type of 1099 form
Different 1099 forms report different types of income or payments. Take note of which form you received.
3. Reconciliation with your year-end statement
Compare the totals on your 1099 with your year-end owner statement to better understand how the reported figures align with rent collected and expenses paid.
4. Calendar year coverage
1099s are issued on a calendar-year basis (January 1–December 31), which may not align exactly with lease start dates, move-outs, or invoice timing.
If something does not appear accurate, it’s important to address it promptly.
How 1099s and year-end statements support tax preparation
While a 1099 alone does not tell the full story of a rental property’s financial performance, it serves as an important reference for tax professionals. When paired with a complete year-end owner statement, it can help:
streamline tax preparation
support accurate income and expense reporting
provide documentation if questions arise
Clear and consistent reporting is one of the most valuable tools rental owners can have during tax season.
Year-end reporting for our owners
We provide organized year-end reporting designed to support rental owners and their tax professionals during tax season. This includes detailed owner statements and applicable 1099 documentation, ensuring accurate records are available when needed.
Our role is to maintain clear financial reporting and required documentation—not to provide tax advice.
Arizona rental property considerations
Rental properties in Arizona may be subject to specific state and local requirements depending on the nature of the rental. The Arizona Department of Revenue provides official guidance related to residential rentals and applicable tax rules.
Owners can review current information directly from the state at:
https://azdor.gov/business/transaction-privilege-tax/residential-rental-guidelines
Final reminder
We are committed to providing accurate financial reporting and required year-end documentation for rental property owners. However, we do not act as tax representatives and do not provide tax advice. Owners should always consult with a qualified tax professional regarding income reporting, deductions, and filing requirements related to their investment property.
