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Mohamed Hussein: Alrighty, hello everyone. Thanks for joining us today. We are going to be going through our presentation on
  

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Mohamed Hussein: 1099 filing for the tax year 2025. We’re gonna give an additional minute or two to allow any, stragglers, any other folks to kind of join us. And, while we’re waiting, for those of you that are already in the… in the meeting webinar here, let’s comment maybe a name and…
  

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Mohamed Hussein: The… The state or city that you’re calling from.
  

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Mohamed Hussein: Tyler, by the way, you’re sharing your, Slack screen, versus the 1099 presentation.
  

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Mohamed Hussein: Steven from Montana?
  

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Mohamed Hussein: Sarah from California?
  

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Mohamed Hussein: Stephen from Palm Springs.
  

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Mohamed Hussein: All right, we’ll go ahead and get started here. Hello, everybody. My name is Mohamed Mohussein. I’m the CEO and founder here over at Balanced Asset Solutions. We are a CPA accounting and consultancy firm specifically focused on real estate and prop tech.
  

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Mohamed Hussein: Today, we will be going through the process of 1099 filing for the 2025 tax year, what is potentially going to be changing in the 2026 year, and how property managers
  

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Mohamed Hussein: tips and tricks on how to… how you should be preparing, hopefully. For those of you that are on the call, this is not the first time you’re hearing a 1099. They are due, kind of, at the end of January, for the most part. And so, we’ll be going through, kind of, the process. We have a presentation here. We will be sharing for those of you
  

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Mohamed Hussein: Yeah, that have, confirmed to attending this webinar a copy.
  

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Mohamed Hussein: of the recording and our presentation here. So, we’ll go ahead and kind of get started.
  

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Mohamed Hussein: Tyler, let’s go ahead and go to the next slide. So, today’s agenda. So, we’ll be covering what’s new, the mandatory e-filing requirements.
  

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Mohamed Hussein: the IRIS, I-R-I-S, migration, deadlines, to keep in mind for 2026, reporting and validation, frequently asked questions, and then lastly, how we can potentially help.
  

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Mohamed Hussein: So, what is new? So for the 2026 year, the IRS has, procured or created this portal. It’s IRIS portal. It’s a browser-based login system, and this is where you would be going in in order to be able to fill out or submit your 1099s. It is free, it allows for you to do bulk uploads.
  

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Mohamed Hussein: Unlike the FHIR system, it has… it has, TIN checks, so for… as you’re submitting the 1099s, if a EIN number, a TIN number does not cross-reference with the individuals or the entities that you’re submitting the 1099s for, it will flag it. And so, kind of streamline that process before figuring it out later.
  

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Mohamed Hussein: The IRIS portal does have an API. It’s an automated transmission that goes directly to the IRS, and it does require a IRTCC code.
  

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Mohamed Hussein: Now, the FHIR legacy system, which many of you may have used in the past.
  

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Mohamed Hussein: The IRS keeps punting when they’re going to stop supporting it. Today, or as of now, the IRS is allowing for the fire and legacy system to be used for submitting 1099s. However, it is scheduled for retirement in 2026. If you want to continue to use that FIR legacy, you do… it does require for you to revalidate and get a TCC code.
  

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Mohamed Hussein: Okay, and by the way, as I’m talking through the kind of the presentation here, for those of you that have any questions, feel free to post them into our Q&A. We’ll answer them if they’re relevant to the slide or the current topic that I’m talking about. If not, then we will save them towards the end, okay?
  

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Mohamed Hussein: Okay, Tyler, let’s go ahead and go on to the next slide here.
  

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Mohamed Hussein: So why does this matter for, you know, property managers? So it does, lower administrative friction, especially for, kind of, smaller vendors. It requires you to follow all, your… your… all… for all owners and major service providers. If you are a…
  

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Mohamed Hussein: corporation, you do not need to submit a 1099 or a 1099 to vendors or entities that are corporation. It would just be entities that are LLCs or partnerships. And so, there is more audit scrutiny that’s happening around, kind of, payer compliance. The IRS essentially uses the 1099 data that gets submitted to understand what potentially the income
  

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Mohamed Hussein: ramifications are of the entities, vendors, and owners that you’re submitting the 1099s for.
  

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Mohamed Hussein: The new IRIS portal, it does require setup and testing ahead of deadlines, and then there is a TCC kind of validation, process, that needs to be, that needs to be passed in order to be able to maintain, kind of, filing access moving forward.
  

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Mohamed Hussein: Let’s go ahead and move on to the next slide. So what counts towards the 10 return e-file rule? So you have your 1099 NEC, you have your 1099 miscellaneous.
  

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Mohamed Hussein: 1099 interest, 1099 div, 1099-K, which is for investments, investor and dividends, 10998,
  

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Mohamed Hussein: 5498W2, and a lot more. For the purposes of this presentation, the main 1099s that you guys need to worry about are the 1099-NEC and the 1099-MISC miscellaneous.
  

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Mohamed Hussein: If you have more than 10 total 1099s, you have to e-file, so you cannot submit 1099s manually via paper. That was a rule that actually changed a couple years ago, so if you have more than 1099s that need to be submitted, they do need to be submitted in a digital e-file format.
  

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Mohamed Hussein: Let’s shift to the IRIS, IRIS portal.
  

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Mohamed Hussein: So, TCC requirements for 2026. So, legacy, if you’ve used FHIR in the past.
  

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Mohamed Hussein: and you had a TCC code, those need to be revalidated. You may have gone through this process last year. If you have not, you’ll need to go through that process now. And so, in order to get an IRTCC, you have to do it through the IRIS portal. And so, and there’s a whole process where you have to go through a…
  

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Mohamed Hussein: verification of identity through ID.me, ID.me, and then it requires kind of annual maintenance that’s kind of required.
  

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Mohamed Hussein: If your TCC code is inactive, you will not be able to file 1099s electronically, so this is a very critical step that you get your TCC code.
  

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Mohamed Hussein: Let’s go ahead and move on to the next slide, Tyler. Okay, so the IRIS filing process. So, you first need to log into ID.me, and you need to create a profile there. You’ll submit what’s called an IRTCC kind of application, assign responsibility… assign responsible officials.
  

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Mohamed Hussein: And then you’ll upload and transmit, via the IRIS portal. Now, when you submit your IRTCC application, the IRS will send you an actual PIN through the, or before you’re able to submit your application, they’ll send you a PIN through the mail.
  

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Mohamed Hussein: Assuming that your application got approved, and then you’ll use that PIN to actually, like, sign the application. And then from there, your portal will be active, or your profile will be active, and you’ll be able to submit and transmit via the IRIS.
  

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Mohamed Hussein: Question from Holly. If we filed IRIS last year, do we need to reevaluate our TCC? No, you do not. You can continue to use that TCC code. Is there a way to check if my TCC from last year is still live? So, if you use… if you used your TCC from last year, most likely it should be… it should be live, and you should be able to use that today.
  

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Mohamed Hussein: Depending on whether you use the FHIR system.
  

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Mohamed Hussein: It would have… if you tried to use the FHIR system last year and used your TCC code, if it was active, then you should be able to use it this year. You had to… you probably went through some type of TCC revalidation process in the past, and so it should be active. There shouldn’t be an issue for that today.
  

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Mohamed Hussein: In terms of being able to check if the TCC code is actually active, you would do that through your ID.me portal. So the ID.me portal will give you actual validation of what TCC codes you have available to yourself.
  

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Mohamed Hussein: Where do I go to get a new IRIS setup? So you initially need to go through the ID.me verification process, and on the IRS, on that site, you’ll be able to submit an IRTCC application. And by the way, coming out of this presentation, we also have kind of a set of instructions that are also with screenshots that are listed, and you can also see that kind of on our website, and we’ll provide that collateral coming out of this presentation.
  

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Mohamed Hussein: I am…
  

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Mohamed Hussein: Question from Sam. If we used TCC last year in FHIR and plan to use IRIS this year, does that require a new, different TCC? So if you used TCC last year in FHIR, you probably went through that validation process. You can submit this year again via FHIR. If you want to use the IRIS portal, you will need to submit a new application and get a new TCC code.
  

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Mohamed Hussein: What if I already have a IRS TCC from last year for our operating account, not rental? So, it doesn’t… you can use… you can use the same TCC code to notice… to submit the 1099, so you don’t have… it is not segmented. The code that you’re able to use is not segmented based on whether you can do it for rentals or whether you can do it for the operating account, it doesn’t matter.
  

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Mohamed Hussein: If I’m a bookkeeper for several small businesses, would I set up an IRTCC for my business and file all my clients through that, or do I have to set one up for all my clients? You can just set up once.
  

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Mohamed Hussein: You can use the same IRTCC code in order to submit for both your business and file all your clients as well.
  

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Mohamed Hussein: Alright, Tyler, let’s move on to the next slide.
  

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Mohamed Hussein: Deadlines…
  

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Mohamed Hussein: Okay, so January 31st, the same thing of every year, you have your NEC and your miscellaneous… you need to furnish the NEC and the miscellaneous to your recipients, and you need to e-file your NEC to the IRS. The NEC forms and NEC is usually used for your vendor payments.
  

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Mohamed Hussein: And so those should be submitted… those need to be, submitted to the vendors who are going to be getting a 1099. A lot of the property management accounting systems you may be using today are able to kind of create those.
  

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Mohamed Hussein: If you are doing a paper filing, that is not due until February 28, 2026. Now, again, the paper filing is only available for those that have, you know, less than 10… less than 10 1099s that need to be submitted. And then March 31st, 2026, is when the electronic filing deadline is for the 1099 miscellaneous form. The 1099 Miscellaneous form is what you would be submitting to your owners.
  

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Mohamed Hussein: Okay.
  

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Mohamed Hussein: Question from Jessica, will Appfolio still have FHIR capabilities for this year? They are, by this year, I’m assuming you mean by 2025, they are… yes, the answer is yes, you should be able to still create, that FHIR file. However, depending on what, like, tier, threshold or environment that you have through Appfolio, they have different tiers. I don’t know if it’ll be readily, or if you can see it through the UI. One way to check is
  

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Mohamed Hussein: in the search, the universal search at the top, you can just put in 1099, and then it’ll bring you to the 1099 screen, and you’ll see there if you still have the option of a button to create the firefile.
  

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Mohamed Hussein: Let’s move on to the next slide, Tyler.
  

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Mohamed Hussein: Preparing your 1099s. So, this is a validation process you should be going through. Ideally, we suggest kind of starting this process in Q3, and generally speaking, whenever you onboard a new vendor and an owner, you should go… you should go through this, this process to ensure at the end of the year, you don’t have to
  

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Mohamed Hussein: you don’t have to go through this process of trying to get this information. So you want to validate the actual payer, so check TINS,
  

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Mohamed Hussein: or EINs.
  

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Mohamed Hussein: addresses, withholding, and classifications. You want to review reportable activity, expenses, and income coding. So, one thing that I want to comment here is that, if you are using, you know, Yardi, Appfolio Building, whatever these different product, property management systems that exist, you want to make sure that you haven’t been
  

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Mohamed Hussein: creating expense transactions via journal entries. So, these systems use the payments that have gone to vendors.
  

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Mohamed Hussein: and and to be able to calculate the amount of the 1099 balance. And so, if you create a journal entry, that is not a transaction that shows up under a vendor ledger, and so that transaction won’t be captured as part of the 1099 balance, okay? So it’s important that, when you’re creating any type of expenses within your accounting system, that you’re always creating an actual payable and a payment.
  

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Mohamed Hussein: Versus just creating a journal entry, okay? additionally, if you migrated to, like, I’d say afolio Mid-Year, or even Yardi, on the… on the owner and all the… on the vendor profiles, you’ll see that there is an option for,
  

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Mohamed Hussein: for, the 1099 balance forward, and that’ll be used in conjunction and added with whatever. So if you migrated, let’s say, in April of this year, you know, all the payments that went to a particular vendor, for example, January through March, that should be entered into the 1099 kind of balance forward on the vendor profile, and then whatever payments
  

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Mohamed Hussein: Subsequent payments that are sent out to the vendor after that date will be added to that figure.
  

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Mohamed Hussein: you need to choose your filing method, whether it’s going to be through the IRIS portal or the A2A. A2A is used for, like, API, so, you know, if you have a very large amount of volume, I would say, like, you know, thousands, it probably makes sense to use kind of the API transmission method, or to be able to get that, to be able to do that, kind of en masse.
  

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Mohamed Hussein: You want to transmit, you know, file and documents to transmit the returns, issue recipient copies, and then retain records, okay?
  

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Mohamed Hussein: Let’s go ahead and move on to the next slide. Let’s see if we can knock out some of these questions. Sam, I had a question, don’t have to talk about it now, but our main issue is when we’re receiving W-9 forms, most of the time, they are old or wrong. In other words, issuing
  

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Mohamed Hussein: 1099s to the wrong SSN or address. IRS has sent us notices stating that we need to withhold starting from this date until they give us the correct name. Is there a database we can use to reverse lookup at EIN SSN?
  

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Mohamed Hussein: For most up-to-date information. Okay, so when you are submitting, and drafting the 1099s through your IRIS portal, it actually does an EIN, or an attend check against whoever that individual is, or entity that you’re trying to submit the 1099 for. And so that’s… that would probably be the best place in order to be able to check that.
  

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Mohamed Hussein: It’s a little bit… a little bit concerning that you’ve been getting, you know, W-9 forms, with the wrong
  

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Mohamed Hussein: Social security number. Hopefully, maybe the address has changed. The entities, obviously, you know, every state, like, through the actual state secretary website, has all corporations, entities, and LLCs, and so that is also another way to kind of check if the EIN number matches with the actual entity and the address.
  

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Mohamed Hussein: Sharon, the issues we ran into this year is the vendor info provided on the W-9 does not match the IRS record. What do we do other than changing the reporting format? The issues we ran into this year is the vendor
  

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Mohamed Hussein: info provided on their W-9 does not match the IRS record. So, it depends on what information does not match the IRS record. If it’s the address.
  

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Mohamed Hussein: that, you know, there… so, again, you can look… you can look either through the IRIS portal, or look on the State Secretary website. The Secretary… the State Secretary website is probably the best way… like, most efficient way, to kind of check that information. That’s also something that you should be doing, it’s probably your vendor onboarding process, and it’ll show you through your Secretary’s State website, like, the name of the entity, the EIN, and the address, and that’s the same information that the IRS will also look at.
  

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Mohamed Hussein: David, we have a rental management and mortgage collection in our business. The mortgage collection software is still producing FIR files for the 1098s. Will we, as a single company, be able to submit both FIR and IRIS?
  

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Mohamed Hussein: I, for this year, yes, you will be. After next year, you will no longer be able to use the FHIR system. Everything will transfer over to the IRS portal and submission system. My suggestion is.
  

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Mohamed Hussein: To get ahead of that, and probably consolidate that, and work on that transition this year, so that, you know, you don’t get, you don’t get bombarded last year in having to fix this.
  

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Mohamed Hussein: you know, if Yardi works with the… with IRIS, yet only seeing fire mentioned in the universal search. Yardi does not work with IRIS yet. You are correct, today they only have the fire system automation and submission that’s, that’s available.
  

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Mohamed Hussein: The IRIS is a separate portal that the, that, that the IRS hasn’t mandated yet. Again, they’ve been kind of punting
  

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Mohamed Hussein: The use, or deprecating, being able to use the fire system was actually supposed to be deprecated two years ago, and they keep hunting it each year. And so, for as long as, you’re able to use fire, I don’t think, Yardi is gonna… is gonna change that yet. So, it could be next year.
  

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Mohamed Hussein: Reporting and verification.
  

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Mohamed Hussein: Software reports. So, within, Appfolio, Yardi, whatever product that you’re using, there’s usually a summary report that can be generated. This will look at the totals, for each owner and vendor based on the accounting information that’s been entered into the database for the year. You can usually, like, filter based on the payer, whether the payer is going to be the management company or whether it’s going to be the owner. The 1099 detail will actually show you the transactions that are
  

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Mohamed Hussein: Contributing to those totals.
  

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Mohamed Hussein: And and we also suggest, as part of that process, to also review, kind of, the GL accounts that were coded against the expense accounts, for example, that were going for vendor payments, or the equity accounts that are going for… are going out for the owner distributions and payments.
  

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Mohamed Hussein: Let’s cross off a report. So, there’s a 1099 miscellaneous form for the owner. This is looking at, rental income that’s been allocated. One thing to understand, that the 1099 miscellaneous also includes prepaid rent.
  

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Mohamed Hussein: So, some of you may be getting complaints or, concerns from owners that, hey, you know, a tenant made a, you know, tenants made payments at that, you know, the last week of December for next month’s rent. This should not be considered income. So, your 1099 miscellaneous form, the IRS does consider that as income, the prepaid rent during that year, and so it will consider both the rental income as well as the prepaid rent.
  

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Mohamed Hussein: Another thing that’s very important is to verify the ownership periods. This is very critical, so when… if you are managing a property on behalf of an owner, and during that same year, that property has changed ownership from one entity or one individual to another, you need to capture exactly when that change happened. That is how the accounting system within the property management system you’re using is going to be looking at
  

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Mohamed Hussein: how much revenue or income to allocate to one owner or another. If you forget, if let’s say, for example, there was an ownership change that happened, let’s say, in November or October, but you didn’t process that until November, you need to backdate that ownership change in, like, to the period of when exactly that change happened, so that the income
  

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Mohamed Hussein: When it comes to that 1099 calculation, it’s allocated correctly between the two owners.
  

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Mohamed Hussein: Vendors get the 1099-NEC form, so, and you only need to report that if they’ve received over $600 on a calendar annual basis. This excludes, again, corporations.
  

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Mohamed Hussein: So if it is… if it’s an entity or a vendor that has… that’s incorporated, you do not need to send that to them. And then, so one thing you want to do is confirm the classification of those vendors.
  

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Mohamed Hussein: And again, you want to look at the vendor ledgers, and also ensure that if there are any transactions that you have created, that are via journal entries, but should be under an actual vendor, that as you’re going through your review process, that those journal entries get transferred or converted into a payable and payment, so that the 1099 can be properly calculated.
  

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Mohamed Hussein: Question for Sharon, how do we separate 1099 miscellaneous recipients from 1099 NEC recipients? In Appfolio, currently every eligible vendor is reported in…
  

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Mohamed Hussein: on one report. So again, the 1099, miscellaneous is specifically for owners. The 1099 NEC is for vendors.
  

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Mohamed Hussein: So, what you want to, you should, when you’re on the filter screen, or on the main screen, atfolio should be able to give you the option to kind of filter between the two. Every eligible vendor would be on the 1099 NEC form, and then every eligible owner would be on the 1099 miscellaneous form.
  

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Mohamed Hussein: 1099-NEC, do we have to go to LLCs? Yes. LLCs, LPs, basically any entity type that’s not incorporated, that’s not a corporation.
  

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Mohamed Hussein: Good question, Holly.
  

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Mohamed Hussein: Okay, let’s move on to the next slide, Tyler.
  

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Mohamed Hussein: Common questions.
  

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Mohamed Hussein: Do I need a new TCC? Yes, if you are using a legacy TCC, it does require validation. The IRS portal uses the IRTCC code, so when we say legacy TCCs, if you got… if you received that TCC code over 2 years ago, you do need to go through that validation.
  

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Mohamed Hussein: If you are going to be using the IRIS, the IRIS portal, you have to submit an application through that IDME process, and you’ll get a new IRTCC code.
  

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Mohamed Hussein: Can my… can my software file for me? Only if they serve as a transmitter. So, somebody had asked a question earlier about, hey, can I, you know, can Yardi submit through IRIS? So, Yardi can still submit through FHIR,
  

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Mohamed Hussein: they are an actual transmitter, maybe in the future, but next year they’ll probably change that to the IRS when the IRS starts forcing, like, that particular process. But other software providers that are not transmitters, like AppFolio, will produce the files for you, and then you will need to submit that.
  

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Mohamed Hussein: Can I still file paper? This is only if your aggregate count is under 10.
  

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Mohamed Hussein: Will the IRIS replace the fire? Yes, it will, and this is scheduled to retire, some point in 2026.
  

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Mohamed Hussein: I’ll go into our questions and our Q&A here.
  

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Mohamed Hussein: This question from Holly, 1099NEC, do we have to go to LLCs? Yes, it does. Catherine’s question here, are legal expenses on the 1099 miscellaneous, rather than 1099?
  

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Mohamed Hussein: NEC. So, if it’s a legal expense, that means that it was probably some vendor or a law firm that was paid for that, I presume, or some bill that you’re kind of referring to here. That firm, or whoever that vendor is.
  

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Mohamed Hussein: would be getting the actual, they would be getting their, the 1099 NEC form.
  

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Mohamed Hussein: Steven’s question is, so with S-Corps, you don’t have to submit to IRS. For… generally speaking, corporations, it doesn’t matter if they’re C-Corp or S-Corp, you do not need to submit 1099s for.
  

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Mohamed Hussein: Okay, let’s move on to the next slide, Tyler. Was this the last slide that we had?
  

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Mohamed Hussein: Okay, if you have any questions, you can, submit, any questions you have to info at balancedolutions.com. Our website is www.balancedsolutions.com. We are partners with, atfolio, Yardian, a lot of the big software providers.
  

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Mohamed Hussein: That are in the property management industry. So, if you need any help with 1099s, cleanup accounting, tax accounting, anything associated with that, we are kind of uniquely positioned in being both a
  

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Mohamed Hussein: technology and software expert, as well as a CPA and accounting firm, and can help with that. Coming out of the presentation, you can also go to our website under the services. You’ll see a 1099 section that has also our frequently asked questions, and also the step-by-step screenshot and instructions on how to get your TECC codes. Now.
  

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Mohamed Hussein: If you are submitting an application today for a TCC code, it takes the IRS some time to send out and assign the TCC code. So, towards the end of the year here, these 1099s are due by the end of January, and so… and you should budget for about 45 days.
  

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Mohamed Hussein: For the amount of time for you to get your actual TCC code. So if you have not submitted an application and need the TCC code to revalidate your TCC code, chances are that you won’t be able to get that completed before, you know, the 1099s are due at the end of January. So I would highly suggest either using a firm like ourselves or another accounting firm to submit
  

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Mohamed Hussein: or submit your 109s this year on your behalf, and at the same time, you can start the application process. Unfortunately, a lot of folks wait till kind of the end of the year to submit kind of those applications. The IRS also gets, like, a huge backlog and tends to be moving slower, coming out of the holiday season and getting those, TCC codes assigned.
  

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Mohamed Hussein: So, thank you so much, everybody, for your time, and again, if you have any questions, feel free to reach out, to the web, to, either our website or, info at balanced assetsolutions.com. Let’s have a wonderful holiday season, and, thank you for joining our presentation today.