With the 2024 tax season just around the corner, title & escrow companies across the country are working to balance day-to-day operations with a growing list of tax-related tasks. Completing and providing a 1099 to the seller and the Internal Revenue Service (IRS) for all applicable real estate transactions is a key responsibility for these organizations.
1099s are a series of documents used to report non-employment income to the IRS. The 1099-S form is specifically used to report the sale and exchange of real estate. It ensures that sellers declare the full amount of capital gains on their tax returns and helps the IRS determine the amount of taxes due from a seller on all relevant transactions within a given tax year.
Key dates for filing 1099s in 2024
- Complete 4419 at the IRS website: If you are filing 1099-S forms electronically for the first time, you’ll need to complete this step. Visit the IRS Filing Information Returns Electronically (FIRE) website and create an account. Deadline: As soon as possible.
- Request a Transmitter Control Code (TCC): From the FIRE page, you can request an IRS Transmitter Control Code (TCC). This code can take 45 days to be issued, so make sure to complete this step soon. Deadline: As soon as possible.
- Submit 1099-S forms to Sellers: Title agencies must send all eligible sellers a copy of the 1099-S for the transaction(s) they were party to. The earlier this is done, the better, to avoid penalties for not abiding by the deadline. Deadline: Postmarked by February 15, 2024.
- Submit 1099-S forms to the IRS: This is the final step in the filing process. Once all deficiencies are resolved and information is ready, you can complete your 1099 forms and file the final version with the IRS as a paper filing or electronically on the FIRE website. If you’re submitting a paper filing, there is a limit of 249 records. Deadlines: Paper filing postmarked by February 28, 2024; electronic filing submitted by April 1, 2024.
NOTE: The above dates are listed on the IRS FIRE page as of the publication of this article. These dates are subject to change by the IRS and should be confirmed on the IRS website before filing.
Filing 1099s with Qualia
The 1099 filing process can be overwhelming. Title & escrow agents must keep track of all information needed for each file, correct missing information, and generate individual forms for each 1099-S filing.
Qualia has built-in functionality to make preparing and filing as easy as possible. As orders are opened, the applicable information is automatically populated into a 1099 form, and a deficiency report is generated to alert agents of any missing fields. Using this generated report, agents can seamlessly navigate to the applicable files to correct any deficiencies.