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Has anyone received their 1099k tax forms? VRBO could tell me nothing!
nope, nothing yet. But then, I haven't gotten anything from PayPal either. ridiculous.
I used paypal for a very short time but did get 1099 couple weeks ago from them.
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Why would VRBO send owners a 1099?
if you use their reservation manager to collect payment, then depending on the total $ value for the year, you should be getting a 1099 from them.
to add to maui's comment --- so should ANY financial entity that you pay a fee to process payments, if the fees total more than $600.00 a year. ( otherwise I think it's up to you to track those expenses).
Because they collect and send the rents to me.
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Unless you have over 200 transactions/yr (I wish) you won't be receiving a 1099k from either paypal or vrbo.
There is a report that you can pull from your payments tab that will list all the payments collected AND the fees assessed. Even though you don't have a 1099, it's easy to report the net income. Hope this helps!
some of the incorrect things on this board amaze me. You would not get a 1099k from vrbo. you would get one from PAY PRO'S the credit card vendor. vrbo does not process credit cards. Also the irs does not require you to report 1099 k. let me give you an example. I charge a renter 3k to stay in my house. that includes the cleaning fee and taxes. I get a 1099k for 3k. Do i report that whole 3k? No i don't report taxes nor cleaning fees(in many states) as income on irs form sch e as income. yet the irs gets this 1099 k that says 3k and asks me why are you not reporting the whole 3k? the form 1099k is incorrect as it includes income that is not taxable to me
My understanding is that you would report the cleaning and sale taxes as expenses against what you collected. I think the bottom line is that these folks were expecting some sort of reporting of what had been collected on their behalf. If this should come from PayPros, then perhaps there could/should be a link to the appropriate contact on the Reservation Manager page.
you are correct about the cleanings but not the taxes. The cleaning money is paid to you and its your responsibility to pay the cleaner and thus an expense. With taxes your just a middle man and just collect it for the state and county thus its never income to you. with cleaning fees you could collect that and actually clean yourself thus its income., taxes are mandatory and as i said you just collect for the state so its never income to you thus you don't report
I believe that it is preferred to report taxes collected as income when collected, and then deduct them as an expense when paid to the taxing authority.
The difference is that assuming that you are on a "cash basis" and a calendar year basis, you might collect taxes in December, but not pay them until January. If you are on a fiscal year basis, the same principle would apply. If you are not on a cash basis, you should get advice from an accountant.
I would not, however, worry about it too much At the very worst, if you are audited, they may recalculate your taxes, and you may have a small refund, or a small amount (plus interest) due. On something like this, they would likely only want to "correct" your bookkeeping, not punish you.
Nonetheless, I am sure that an accountant would prefer that if you are on a cash basis, you repot all monies received as "income" and all monies paid as "expenses".
My view on taxes and cleaning on my property is that I'm actually just the middle 'man' the whole way through. I collect, I never clean so the fees go right back out and my taxes of course are automatically paid right back out as well. However, the gov't appears to look at things exactly as lpiccirillo and sapphiresteve indicated. All monies acquired are income, outgoing monies are expenses. That's the way my CPA has me do things and that's the way I've set up my spreadsheet calculations. I've always been under the same impression as what they have indicated.
beachbumz your views are incorrect.we went threw this exercise about 3 weeks ago on weather taxes are to be counted as income. In reality i don't think it really matters much as it a total wash i bring in 5 k of taxes and write off 5 k of taxes. i've studied this question pretty hard. theres only one place on sch e to put taxes as an expense at thats line 16 which says taxes. but after at least 10 sites of cpa/s who explain line by line what goes in the boxes line 16 is to write off your property taxes. I assure you in states that require you to collect taxes on cleaning fees i bet 1 out of 10 individual owners collect it. the way i found out is when i saw property managers collecting it. any way not a big deal
It really isn't a total wash, although it comes pretty close. If for example, you collected a hundred dollars in taxes in December, and did not remit that amount until the next month, you would show that as income in the first year, and as expense the second year. Because you will pay income tax on that hundred bucks a year earlier, you will have lost some money.
I think the important things are:
(1) it's simply better bookkeeping to show the transaction as income with an offsetting expense.
(2) under all circumstances, the IRS takes a dim view of not reporting monies received.
I do what my CPA recommends for me to do. I pay her to know state and federal requirements, as well as tax code updates. I do pretty well with knowing the federal tax code, but I'm certainly no expert. I prefer to be able to show I had monies come in, this is what was taxed, here are the tax figures showing that amount as income with x amount of taxes derived, here is the payment. It leaves a rock solid paper trail in case of an audit. Like you said it's no big deal. I just like rock solid audit trails.