Apartments.com now requiring tax information
Mike MalyyPro Member
Investor · Sacramento, CA · Member since 2019 · 44 posts · 38 votesHi All,
So I am a very small time landlord and I use Apartments.com (formerly Cozy) to collect payments. This morning I got an email saying that they want my SSN to report any income I get over $600 to IRS. I have always been very skeptical and cautious when it comes to giving my SSN to anyone. I quickly searched recent news, but have only found articles a few weeks old, and even those state that the threshold was raised to $10k. What am I missing? Is this an actual new requirement now or Apts.com just wants my personal information? Did anyone get the same notification on any other platforms? If not, then I am ready to switch to something else. Thanks in advance for your replies.
@Mike Malyy
I do not divulge financial information.
The IRS and I know where we stand. It's not the job of an outside organization to be a cop for the IRS.
By the way, Apartments.com is not the only place you can use for your rental leads.
My business is my business.
I got it too, and when I try to update my info it says.... "We were unable to verify this taxable entity with the IRS. Make sure the information you’ve entered matches exactly with what the IRS has on file, and that the address you entered is a valid US Postal Service address."
I'm know the info I'm putting in is correct.
Took me three guesses on my info to get it "match" (rd vs road, for example). I almost gave up on the LLC, had to find some filing info to get the agent's info in the correct order (with commas after each line of address, since it is three lines under the name, then another line with the city, state, zip).
Don't care if they send them, we report all income. Get these from S8 and some charity/covid relief programs. And we file if 600 or more for all vendors without a retail storefront.
Unless you are massively cheating on taxes, getting the forms is no biggie, they are always way under what we take in.
That was it! I had to type out Avenue instead of Ave.
I'm curious, if you enter payments manually as 'offline payments', do they still get reported? Those payments don't actually go through Apartments.com
@Mike Malyy
I got the letter from Apartments.com today saying the same thing. I had to provide it to AirBNB last week, so this is nothing specific to AirBNB. You can thank the Biden IRS for this. They are pushing all payment platforms to report income that goes through their payment systems. This will be common on any form of digital payment going forward. They are just trying to catch tax fraud to increase tax revenues. As long as you file your taxes and report the income, there is no concern here. Your SSN is your tax payer ID number if you operate as a sole proprietor (no entity like LLC). It will in no way increase your tax liability, but it could be an audit flag for people not paying taxes on rental income.
Also be aware as a landlord, if you hire services and pay someone more than $600 a year, you are required to send them a 1099 and file with the IRS. You don't need to do this if the business is incorporated or you pay by credit card.
It is possible that other payment platforms are not requiring this today, but with significant pressure from the IRS, it is unavoidable.
I'd ask them - I use them for payments, but don't do manual entry there. I do at another site, but it hasn't asked me for tax info (what I read is that it is ONLY for processed payments, and at that 10K level, so not sure what the 600 is about). At least apartments.com lets me set up an ID for each bank acct they deposit to (one reason I moved some of the payments off of another site, as it allows multiple bank accts, but wants to report it all under one tax ID, which is, well, exactly wrong).
ok, finally read their article, this is for 2022 changes. Not sure if those are finalized or just anticipated due to tax changes that Congress is working on. Again, no biggie - probably get it reported by the bank, too, as the inputs will be over 10K for the year (I think that was originally going to be $600, which may be where apartments.com got their info). So long as they don't add them together and try to make me pay tax on the same amount more than once, I'm good.
I received the email too. I thought the $600 (now recommended to $10K) was just being attempted to be pushed thru congress, not that it has yet. So if this is the case, why is apartments doing this already? And my deposits go directly to my bank account which would be governed by the laws anyway. All my income is documented in my taxes so not worried about being 'found out' or anything but I still do not agree with this. Wonder if all the other rent collection companies like Innago will be doing this before it has even passed congress. BTW: I've not been happy with apartments since I was originally with Cozy and forced to switch over. I've been thinking of switching to another but hadn't since my tenants are already setup here but maybe this will be the push I need to make the change. ?????
@Mike Malyy
I do not divulge financial information.
The IRS and I know where we stand. It's not the job of an outside organization to be a cop for the IRS.
By the way, Apartments.com is not the only place you can use for your rental leads.
My business is my business.
@Daniel Smyth I completely agree with you. I’m always skeptical of anyone who asks for my confidential information without actually needing it to conduct our business. Heck, I don’t even give it to medical offices to verify my insurance coverage and they figure out how to do it still.
Also, I thank everyone else for chiming in. To be clear, I’m not afraid of IRS as all of my records are straight, but I’m not a fan of Apts.com using this strategy, so I will start looking for alternatives.
They are probably worried about not having the info, if the smaller $600 level passes, as nearly everyone they process would go over. The old rules required 200 payments AND a $$ amount, so didn't apply to most small companies.
If they process pmts and don't have your tax info, they can get some hefty fines, for each missing tax id. Same reason companies verify ssn/name/bdate quickly for new hires (but there, they can just keep asking you for the info, until you quit or the year ends, and the fines are much smaller).
edit to add: for those who don't want to enter the info, just go back go cash or mailed in money orders that you take to a cash advance place to turn into cash. Don't put it into your bank acct (hmmm... legal issue here, the state REQUIRES a bank acct for security deposits ... so, maybe check with your attorney first).
Anyplace that processes pmts will have to report and every bank acct will do so, as well (two extra numbers on the 1099 you already get that shows interest/dividends).
Maybe you can get around with cash apps - of course, most of those forbid commercial pmts, such as rent (and Zelle doesn't work with my business acct at all, only with personal accts .... which gets back to the bank will report it anyway) -- if you get caught, expect to get dunned for business charges (my Paypal is business, so I don't worry about using it and have trained tenants on how to use it if they don't want fees added to their rent pmts).
@Daniel Smyth I completely agree with you. I’m always skeptical of anyone who asks for my confidential information without actually needing it to conduct our business. Heck, I don’t even give it to medical offices to verify my insurance coverage and they figure out how to do it still.
Also, I thank everyone else for chiming in. To be clear, I’m not afraid of IRS as all of my records are straight, but I’m not a fan of Apts.com using this strategy, so I will start looking for alternatives.
The IRS requires this due to changes that the Biden administration pushed into the American Rescue Act. This is to crack down on gig economy workers who are not paying taxes, so they can increase tax revenue. It affects landlords. This passed earlier this year and effective January 1, 2022, bill payment services such as Apartments.com (using ACH), PayPal, Venmo or ANY other alternative must send the tax payer a 1099-K for payments collected over $600. They are collecting your SSN number because tax payer ID number is required on the 1099-K. Your SSN number is your tax ID number if you operate as a sole proprietor. The only way you avoid this is collecting cash or check. The administration is also trying to push this reporting on to banks for physical checks, but they are meeting resistance. Here are several sources that talk about the change:
https://newsroom.paypal-corp.c...
https://www.pwc.com/us/en/serv...
https://taxmedics.net/the-payp...
@Joe Splitrock thanks for the links Joe
@Mike Malyy
I do not divulge financial information.
The IRS and I know where we stand. It's not the job of an outside organization to be a cop for the IRS.
By the way, Apartments.com is not the only place you can use for your rental leads.
My business is my business.
This is a nice sentiment, but the IRS has required 1099/1098's reporting for a looong time. If you use any type of payment system your info is being tracked and reported. It is the law and has been.
The new law expands the type of income ( i believe) but rental income/expense has been reportable for years. And if you use any type of payment system your funds will be tracked and reported....
rental income has been reportable for a while.... years..... just that mom and pops have slipped under the radar.... just report all your income and you will be golden. (and be forewarned, it is SUPER easy for any taxing agency to know what you are doing - so hiding income is pointless.... if they want to they can and will find it all.
Paypal (and other payment systems) have been reporting income for at least a couple years.... maybe 5? Not sure why everyone is all upset. If you dont like using your TAXID as a TAX ID then create a biz entity.
What Biden wants to do is not related to rental income.... which has been reportable (anything over 600) for years
ETA: along with rental income/expense being reportable via 1099s property owners should be 1099ing their subs or any service business they pay. (check the IRS for specifics - I have not been keeping up with the new laws over the last 5 years)
This is all easy to find via google... and the first iteration I found was from 2010.
Paypal (and other payment systems) have been reporting income for at least a couple years.... maybe 5? Not sure why everyone is all upset. If you dont like using your TAXID as a TAX ID then create a biz entity.
You can get a Tax ID to use instead of your SSN (I have one around here, somewhere, from an old sole proprietor business). No need to create a business entity, for those who are truly small (just be sure to beef up your insurance, if you don't have at least a properly run LLC, which will cost you a few hundred a year - the insurance is cheaper for those with one or two places and who own a house, cars, boats or have liquid assets other than IRA/401K -- which are somewhat protected).
rental income has been reportable for a while.... years..... just that mom and pops have slipped under the radar.... just report all your income and you will be golden. (and be forewarned, it is SUPER easy for any taxing agency to know what you are doing - so hiding income is pointless.... if they want to they can and will find it all.
Paypal (and other payment systems) have been reporting income for at least a couple years.... maybe 5? Not sure why everyone is all upset. If you dont like using your TAXID as a TAX ID then create a biz entity.
What Biden wants to do is not related to rental income.... which has been reportable (anything over 600) for years
ETA: along with rental income/expense being reportable via 1099s property owners should be 1099ing their subs or any service business they pay. (check the IRS for specifics - I have not been keeping up with the new laws over the last 5 years)
This is all easy to find via google... and the first iteration I found was from 2010.
The reporting laws for PayPal (and other electronic payment platforms) had a threshold of $20,000 or 200 transactions per year, so the change to $600 is significant. This is a big change taking place January 1, 2022. Look at the links I posted in a previous message.
This is 1099-K, which is credit card and third party payment processors. That means any electronic payment processor is going to be reporting landlords income. As long as your claimed income on your taxes matches what you are receiving, this is no issue.
The current administration is taking a very aggressive stance on tax enforcement. This electronic payment clause was hidden in the American Rescue Plan passed earlier this year. The "Build Back Better" bill they are pushing through congress has $80B additional funding to increase the size of the IRS. That is $45B just for more audits. The IRS did 500,000 audits in 2020, which was a multiyear downward slide down from 1,500,000 in 2010. Staff and budget in 2020 was down 20% from 2010.
Every govt agency sends me one, if they send me a single dollar (luckily, they send me more than that). The covid relief fund reported incorrectly, mingling my business and personal pmts, but no big deal for this or last year, as there is more than enough paid in cash to just make an accounting adj to correct what was paid (they put it all on the LLC). If we have to get some of it next year, tho (let's all cross fingers and hope not), it will be more of an issue and may require sending a note with returns to explain that our county is staffed by incompetents.
rental income has been reportable for a while.... years..... just that mom and pops have slipped under the radar.... just report all your income and you will be golden. (and be forewarned, it is SUPER easy for any taxing agency to know what you are doing - so hiding income is pointless.... if they want to they can and will find it all.
Paypal (and other payment systems) have been reporting income for at least a couple years.... maybe 5? Not sure why everyone is all upset. If you dont like using your TAXID as a TAX ID then create a biz entity.
What Biden wants to do is not related to rental income.... which has been reportable (anything over 600) for years
ETA: along with rental income/expense being reportable via 1099s property owners should be 1099ing their subs or any service business they pay. (check the IRS for specifics - I have not been keeping up with the new laws over the last 5 years)
This is all easy to find via google... and the first iteration I found was from 2010.
The reporting laws for PayPal (and other electronic payment platforms) had a threshold of $20,000 or 200 transactions per year, so the change to $600 is significant. This is a big change taking place January 1, 2022. Look at the links I posted in a previous message.
This is 1099-K, which is credit card and third party payment processors. That means any electronic payment processor is going to be reporting landlords income. As long as your claimed income on your taxes matches what you are receiving, this is no issue.
The current administration is taking a very aggressive stance on tax enforcement. This electronic payment clause was hidden in the American Rescue Plan passed earlier this year. The "Build Back Better" bill they are pushing through congress has $80B additional funding to increase the size of the IRS. That is $45B just for more audits. The IRS did 500,000 audits in 2020, which was a multiyear downward slide down from 1,500,000 in 2010. Staff and budget in 2020 was down 20% from 2010.
I don't see anything wrong with an aggressive stance on tax enforcement. I pay my fair share of taxes (but not a penny more than I have to!), and I expect everyone else to do the same. That's how societies are supposed to work.
rental income has been reportable for a while.... years..... just that mom and pops have slipped under the radar.... just report all your income and you will be golden. (and be forewarned, it is SUPER easy for any taxing agency to know what you are doing - so hiding income is pointless.... if they want to they can and will find it all.
Paypal (and other payment systems) have been reporting income for at least a couple years.... maybe 5? Not sure why everyone is all upset. If you dont like using your TAXID as a TAX ID then create a biz entity.
What Biden wants to do is not related to rental income.... which has been reportable (anything over 600) for years
ETA: along with rental income/expense being reportable via 1099s property owners should be 1099ing their subs or any service business they pay. (check the IRS for specifics - I have not been keeping up with the new laws over the last 5 years)
This is all easy to find via google... and the first iteration I found was from 2010.
The reporting laws for PayPal (and other electronic payment platforms) had a threshold of $20,000 or 200 transactions per year, so the change to $600 is significant. This is a big change taking place January 1, 2022. Look at the links I posted in a previous message.
This is 1099-K, which is credit card and third party payment processors. That means any electronic payment processor is going to be reporting landlords income. As long as your claimed income on your taxes matches what you are receiving, this is no issue.
The current administration is taking a very aggressive stance on tax enforcement. This electronic payment clause was hidden in the American Rescue Plan passed earlier this year. The "Build Back Better" bill they are pushing through congress has $80B additional funding to increase the size of the IRS. That is $45B just for more audits. The IRS did 500,000 audits in 2020, which was a multiyear downward slide down from 1,500,000 in 2010. Staff and budget in 2020 was down 20% from 2010.
I don't see anything wrong with an aggressive stance on tax enforcement. I pay my fair share of taxes (but not a penny more than I have to!), and I expect everyone else to do the same. That's how societies are supposed to work.
I never said there was anything wrong with it. Most people are fine with it, until they are being audited and questioned about legitimate transactions. My old boss owned a small business and they ran things very legit. He was audited every few years and described it as a horrible experience. The trouble is once the auditors are looking, they insist on finding something. It is like arguing with building inspectors about code. The inspector is always right. Only it is worse, because they are accountants...
Personal opinion about heavy handed tax enforcement really doesn't matter. It is happening, so everyone needs to be ready. My books are clean, all my income is claimed and all my expenses are reasonable. I don't pay anyone in cash, so no "special contractor discount" aka they are not paying taxes. I send 1099 to everyone who does work over $600. I use a conservative CPA, who is well educated on current tax law. I check all my CPA's work before submitting taxes.
The bastards got me. It sucked, wasted time and brain power arguing with some nosy *** be ahead. Which in my opinion is why the government does it in the first place.
@Mike Malyy
I do not divulge financial information.
The IRS and I know where we stand. It's not the job of an outside organization to be a cop for the IRS.
By the way, Apartments.com is not the only place you can use for your rental leads.
My business is my business.
Mike,
You and a few other folks on this thread seem a bit confused. This reporting requirement is not the new bank requirement being tossed around in congress.
The IRS has long required any business paying $600 a year or more to any non corporate entity an IRS form 1099. In order to do this the paying business needs your taxpayer info, including your TIN. The fines for non compliance can be quite high.
If you, as a recipient, don't provide the correct information, the IRS notifies the paying business to begin backup withholding. This is to insure the tax is paid on the income. This withholding, if it occurs, can be listed on the recipients income tax return as a credit for taxes paid in the tax year that applies.
Nothing nefarious here. This has been a requirement for decades and is required of virtually all paying entities, even insurance companies paying a claim.
I'm not offering tax advice as I'm not a professional. Just the requirements as I understand them.
Respectfully,
Gary
They should give every taxpayer a colonoscopy. You never know what could be up there.
Great point Gary!
@Gary L Wallman
Gary, thanks for your reply. My ONLY issue is with having to provide my personal information to an intermediary service provider that should not theoretically play a role in any reporting.
@Joe Splitrock provided some links that showed that Apts.com is not the only platform that implements this.
As I mentioned previously, I’m not worried about being reported to IRS as they know everything anyway, but I don’t like providing my confidential information to parties that don’t need to know it.
Thanks again
@Mike Malyy
I do not divulge financial information.
The IRS and I know where we stand. It's not the job of an outside organization to be a cop for the IRS.
My business is my business.
LOL. I guess you have never worked for a business that issues W2s. They collect taxes and send to IRS straight out of your pay. Please share with us mere mortals how you told the IRS where you stand.
If you don't want to use your social security number, you can always use a federal tax EIN number. You can even get one for a DBA "Doing Business As" if you don't have an entity like a LLC.