As 2022 comes to a close and the 2023 tax season officially begins, title agencies across the country are working to balance day-to-day operations with a growing list of tax-related tasks.
Title agencies must submit their 1099 filings to the Internal Revenue Service (IRS). Title agents focus on the 1099-S form, which refers to any proceeds from a real estate transaction collected by the seller. When real estate is sold, the seller is often subject to a capital gains tax, so 1099-S forms must be used for any real estate transactions in the tax year. This tax document ensures that the full amount received for a real estate sale is accurately reported.
Key dates for filing 1099s in 2023
- 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 FIRE (Filing Information Returns Electronically) website and create an account. Deadline: as soon as possible.
- Request a Transmitter Control Code (TCC): From the FIRE website, you can request an IRS Transmitter Control Code (TCC). This can take about 45 days, 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 they were party to. The form must be postmarked by February 15, 2023. The earlier this is done, the better, to avoid penalties for not abiding by the deadline. Deadline: Postmark by February 15, 2023.
- 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 (postmarked by February 28, 2023) or electronically on the FIRE website by March 31, 2023. If you’re filing electronically, the IRS recommends submitting a test file by March 16, 2023. If you’re submitting a paper filing, there is a limit of 249 records. Deadlines: paper filing postmarked by February 28, 2023, and electronic filing by March 31, 2023.
Filing 1099s with Qualia
The 1099 filing process can be overwhelming. Agents must keep track of all information needed for each file, correct missing information, and generate individual forms for each 1099-S filing.
With Qualia, information from a file 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.
To learn more about automation built directly into Qualia, including our 1099 solutions, click below to talk to a Qualia Specialist.