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Landlord 1099-Misc - Cleaning Fees

Are cleaning fees considered a part of gross rental income for a landlord if the property manager keeps them? I am a property manager creating a1099s for my owner/clients. Do I send them the gross amount to include cleaning fees and rents before my commissions and fees for the platforms I rent through (Airbnb/VRBO)? Do I include cleaning fees even though I keep them? Would that technically be a part of my commission? 

5 Replies
GloriaL
Expert Alumni

Landlord 1099-Misc - Cleaning Fees

No, cleaning fees are not normally considered part of the gross rental income. A property management company should issue a 1099-MISC to landlords for your gross amount of rental income. Per IRS the 1099-MISC Form is used to document payments of over $600 for rent paid to owners as well as attorney fees paid for rental business activities such as evictions. 

 

If you include the cleaning fees in the gross rental income, the landlord can take those as a deduction on his tax return as cleaning fees expense.

 

Landlord 1099-Misc - Cleaning Fees

Thanks. Gotcha. But I do issue the 1099s for the gross income before my commissions and the fees charged by VRBO/Aribnb? My owners deduct those as expenses?

Landlord 1099-Misc - Cleaning Fees

You issue the 1099 for the gross rent received  then give them an accounting of  the total  expenses paid on their properties which includes your management fees.   They make specific accounting programs for property managers ... google it. 

Landlord 1099-Misc - Cleaning Fees

Thanks. I do have software but it does not cover this. My business became more complicated/grew in 2020, so I need more complex software. So, I asked the here. My software counts the cleaning fees I charge as part of my management fee since I pay the cleaners, thus my question. 

Landlord 1099-Misc - Cleaning Fees

Think about it logically ... if the cleaning fees are part of your fee then you only have to account for your total fees to the homeowner unless you want/need to separate them.  The homeowner must report the gross rents received and all the expenses + depreciation on the Sch E ... anything you can do to make this easier for them is just good business.  

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