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Correct. Nothing is free. Free rent is considered income. Yes, you are getting free rent through the year, but let's say your market rent value is $1000/month, that comes out to $12,000/year. They have to report that to the IRS, give you a 1099 and you have to claim it on your taxes as misc. income.
Dang it! I knew there was a catch! Haha, is there anyway to write it off or get around it?
I know this is a really old thread, but hopefully someone can answer.
If I as an onsite manager have filled out a W4 for the management company that I work for, does that mean that I will be taxed, too?
I do not receive pay via check; instead it is an exchange for "free" rent.
I understand from this thread that a 1099 implies taxable income, but I haven't seen anything for a W4.
I know this is a really old thread, but hopefully someone can answer.
If I as an onsite manager have filled out a W4 for the management company that I work for, does that mean that I will be taxed, too?
I do not receive pay via check; instead it is an exchange for "free" rent.
I understand from this thread that a 1099 implies taxable income, but I haven't seen anything for a W4.
NOTE: for some reason the proper adding of links isn't working. Copy/paste the URL into your browser if they aren't true links.
It could be considered bartering which can be taxable.
However, these seem to be the rules from the landowners side of it, that if a resident manager meets the conditions, they don't have to pay payroll taxes.
What feels odd to me is that you filled out a W-4. In my mind that implies that they may intend to send you some sort of 1099 or that it is up to you to report your "income" to the IRS at tax time. I think your best course of action would be to get the opinions of tax professionals.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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W4 means they are reporting your rent as W-2 income, just like it as actual pay, so you will pay taxes on it. In fact they will withhold. I'm in commercial real estate, and two of my lease administrators used to do residential apartment management. They came to work here because the starting pay was
almost double, with advancement opportunities. When managing apartments they had to take 2nd jobs despite the free rent.
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W4- Free Rent Still Taxable?
