Year-end checklist for property managers

By Diane Jones, Certified QuickBooks ProAdvisor, 30+ years of bookkeeping
Updated October 2026

Before December 31, get the trust account reconciled three ways for every month of the year, fix any owner balance that doesn’t make sense, and collect your W-9s. In January, close December, send every owner a year-end statement, and get the 1099s out by February 1, 2027. Here’s the whole list, in the order I’d work it.

Before December 31: the trust books

1. Reconcile the trust account three ways, every month. The bank statement, the trust balance in your books, and the total of the owner ledgers plus deposits held should agree to the penny. Start with January if any month didn’t tie. A difference found in March is easy to trace. By December it’s buried under nine months of activity.
2. Look at every owner ledger that’s below zero. An owner balance under zero means another owner’s money paid that owner’s bills. Get the owner to fund it, or find the entry that’s wrong, before the year closes.
3. Clear the stale items. Checks that never cleared, deposits nobody can identify, and tenant payments applied to the wrong unit all sit in somebody’s numbers until they’re fixed.
4. Tie deposits held to the leases. The deposits-held balance, by tenant and property, should match the leases in force. IRS Publication 527 says a deposit you plan to return isn’t income, but any part that’s kept because the tenant didn’t live up to the lease is income in the year it’s kept. Move kept deposits to the owner’s income in the month you keep them.
5. Watch for January rent paid in December. Publication 527 says advance rent goes in income "in the year you receive it regardless of the period covered." Record it in December on the owner statement, and flag it for the owner’s CPA.
6. Move the fees you’ve earned out of trust. Management and leasing fees belong in your operating account on schedule, so the trust holds only owner and tenant money and your income shows up in your own company’s books.
7. Get a W-9 from every owner and vendor. The 1099s need each name and taxpayer ID, and the W-9 tells you whether an LLC is taxed as a corporation. A vendor who hasn’t given you a taxpayer ID is subject to backup withholding at 24%.
8. Total each vendor across all your owners. A plumber paid $800 on three different properties is $2,400 for the year, and for payments made in 2026 that’s over the $2,000 line for a 1099-NEC.

Before December 31: your company’s books

• Management fees, leasing fees, and any fees your agreements let you keep, recorded as income in your company’s books, never left sitting in trust.
• Your operating bank and card accounts reconciled through December.
• Every payroll run from your payroll provider recorded and reconciled, so the books agree with the W-2s the provider sends.
• Your own vendors (your accountant, your software, your office cleaning) tracked separately from the vendors you pay for owners.

In January: owners, 1099s, and the CPAs

1. Close December first. Wait for the last checks to clear and the last deposits to post, then close the month. Every year-end number comes after that.
2. Send each owner a year-end statement. Totals for the year by property, in the categories their CPA uses for Schedule E, with your fees and the repairs you paid shown plainly. Add the ending balance you’re holding for them and any deposits held. I’d aim to have these out by mid-January, ahead of the 1099s.
3. File the 1099s by February 1, 2027. A 1099-MISC to each owner for the rent you paid over, and a 1099-NEC to each vendor you paid $2,000 or more. The IRS copy of the 1099-MISC is due March 1 on paper or March 31 if you e-file, and if you file 10 or more information returns in total, you have to e-file through IRIS. My 1099 guide for property managers covers who gets one and what’s reported.
4. Answer the owners’ CPAs. They’ll ask about repairs that look like improvements, deposits kept, and anything on the statement they can’t place. A clean owner statement answers most of it before they ask.

I’m a bookkeeper, not a tax preparer or attorney. For tax and legal questions, confirm the details with your CPA. I keep the books that make their job easier.