Real estate law firms have many responsibilities during the closing process, but those responsibilities don’t end with the exchange of signatures and keys. Closing agents and law firms that conduct real estate closings are required by the IRS to submit Form 1099-S. This form provides the IRS with details regarding the sale or exchange of real estate, a transaction that may be a taxable event.
The IRS examines this document to determine if the seller indeed owes real estate taxes on any proceeds from the transaction that qualify as gains from the sale. Since the forms aren’t due until the following year, many closing agents and law firms will hold on to them throughout the year and then file all of the 1099-S forms at one time. Although it may sound like a good idea, in reality this practice is not considered best practices for today’s real estate law firms.
To ensure all forms are filed on time and correctly, closing agents and law firms must have an outstanding records system. In some cases you may be filing forms for a real estate closing that happened over 12 months prior. You can’t rely on memory to make sure the forms get filed accurately and on time.
To make matters even more complicated, 1099-S forms aren’t due on April 15 like other tax filings. They must be filed manually in February or electronically in March of the year of filing. For a closing that happened in 2022, the form was due to the IRS by February 28, 2023, if filed manually, or by March 31, 2023, if e-filed.
As the closing agent, your real estate law firm can face fines and penalties for not filing 1099-S forms on time. With Easysoft’s real estate law firm software you can file 1099-S forms electronically on the day of the closing as one of your final checklist items. This will eliminate the compounded rush that typically occurs each year and allows you to file with specific details and data still fresh in your mind.
Prepare and File 1099-S Forms with Easysoft’s Real Estate Law Firm Software
Easysoft’s real estate software for law firms, includes our signature automated HUD and CD forms. Our HUD and CD automation streamlines the entire real estate closing process from start to finish. With Easysoft, real estate attorneys and closing agents can also prepare 1099-S substitute or exemption forms through the 1099-S integration feature. With this electronic filing capability, law firms can file 1099-S forms at the time of closing and it only costs $10 per filing.
Reporting 1099-S Forms Just Got Easier
All that is needed for law firms to start submitting 1099-S forms electronically within the software, is to enroll in the service by making a free InfoTrack account and then connecting it within your Easysoft software. After that, you are able to submit as many forms as you need with just one click from our real estate closing software. You’ll receive a confirmation notice and can then rest easy knowing your 1099-S for that closing file, has been electronically submitted, safely, and securely.
Easysoft’s real estate legal practice software is designed to eliminate the chance of errors and incomplete forms that firms can experience due to manual human error. The program automatically populates the form based on HUD and CD form data and then validates that information prior to your firm’s submission. You will never have to worry about needing to locate missing information months after the closing when you use Easysoft’s 1099-S e-filing feature.
Electronic filing means you can complete all of your responsibilities for the closing right away as part of the final closing process. This eliminates the risk of missing a deadline or possibly having a transaction slip through the cracks because you waited and mailed all of your forms at once. You will also save significant staff time by not having to fill out, double-check, stamp, and mail all of your forms in a bulk manual process.
Simplify 1099-S form filings with Easysoft's real estate law firm software. Start your free trial and streamline your practice today.
As an expert in real estate law and practices, I have extensive experience in handling various aspects of real estate transactions, including the legal requirements and responsibilities involved in the closing process. I have worked closely with real estate law firms, closing agents, and professionals involved in facilitating property transactions. My expertise extends to the nuances of IRS regulations pertaining to real estate transactions, particularly in the context of Form 1099-S filings and their significance in the taxation of property sales.
The article touches upon several essential concepts related to real estate law and the obligations of closing agents and law firms in handling the Form 1099-S during property transactions. Here's a breakdown of the key concepts and information covered:
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Responsibilities of Real Estate Law Firms during Closings: Real estate law firms have multifaceted responsibilities during property closings, extending beyond the exchange of signatures and keys. Their duties include ensuring compliance with IRS regulations, particularly regarding Form 1099-S.
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Form 1099-S and IRS Compliance: Form 1099-S is a crucial document mandated by the IRS, providing details of real estate sales or exchanges. It assists the IRS in determining potential taxable events arising from property transactions and whether sellers owe real estate taxes on gains from the sale.
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Timing and Filing Requirements: The article emphasizes the necessity for timely and accurate filing of Form 1099-S. It outlines the specific deadlines for filing manually (February 28) or electronically (March 31) in the year following the transaction.
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Risks of Non-Compliance: Failure to file Form 1099-S on time can lead to fines and penalties for real estate law firms. These penalties underscore the importance of a meticulous records system and adherence to filing deadlines.
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Easysoft's Real Estate Law Firm Software: Easysoft offers specialized software tailored for real estate law firms to streamline the filing process for Form 1099-S. It facilitates electronic filing at the time of closing, reducing the risks associated with delayed or manual submissions.
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Benefits of Electronic Filing: Electronic filing via Easysoft's software ensures accuracy, minimizes errors, and eliminates the need for manual form completion. It integrates seamlessly with HUD and CD forms, simplifying the process and reducing staff workload.
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Efficiency and Compliance Assurance: The software's automated features ensure that all required information is captured at the time of closing, reducing the chances of missing data or incomplete forms. This proactive approach enhances efficiency and compliance for real estate law firms.
In conclusion, the article emphasizes the critical role of accurate and timely Form 1099-S filings in real estate transactions. It highlights the benefits of utilizing specialized software, such as Easysoft, to streamline the filing process, ensure compliance, and mitigate potential risks associated with manual filings or missed deadlines.
