The paperwork associated with real estate closings can be overwhelming if you don’t stay on top of it. You can’t get away with putting off the HUD closing statement since you need that to close the deal, but too many real estate firms procrastinate on 1099-S filling, leaving them in a scramble at the end of the year. Here are a few tips to keep the IRS at bay.
File As You Go – Just because you have until January 31 to file your 1099-S forms doesn’t mean you should wait until the last minute. 1099-S filing should be a part of your closing process. All the information is fresh in your mind so take a moment to fill out one more document, send it off and forget about it.
File Electronically – The IRS encourages electronic filling so why bother sticking with outdated paper forms? Easy HUD, Easysoft’s HUD settlement statement software, includes an optional 1099-S electronic filing module. You can file with the click of a button. Information is pulled from the HUD form so you don’t have to worry about mistakes on the IRS document. Enrollment in the program is free and your only cost is a very affordable $10 per filing. You get an immediate confirmation number so you know the IRS received your form.
Pay Attention To Addresses – A client selling a house is probably changing addresses. Since a copy of the 1099-S goes to the client, be sure you are using the new address and not sending it to the house that just got sold. This is especially true if you have ignored our first piece of advice and are filing at the end of the year, months after the sale.
Audit Yourself – Even if you file as you go, be sure you haven’t missed any closings. It’s easy to overlook one especially in a large, busy real estate firm but you can be the IRS won’t miss it. Generate a 1099-S Submission Report from the Easy HUD RESPA software as you near the end of the calendar year. This is a record of all your closings and electronic submissions. Look it over to be sure none of your 1099-S filings have fallen through the cracks.