Landlords who don’t want to do all the work themselves often hire a resident manager (also called an apartment manager) to handle the day-to-day details of running an apartment building, such as dealing with repairs, showing and renting vacant units, and collecting rent. the name implies, a resident manager lives at the rental property. some states and cities—California, for example—resident managers are required if an apartment building exceeds a certain size (16 or morenine or more units in New York City). should have a resident manager sign an employment agreement spelling out his or her duties and pay. Detailed guidance on how to hire a resident ­manager, including a sample employment agreement, can be found in Every Landlord’s Legal Guide, by Marcia Stewart, Ralph Warner, and Janet Portman (Nolo). managers (also called apartment managers) are employees of the landlords who hire them. This is so, whether they are paid a regular

salary or are compensated wholly or partly with reduced rent. single court decision or IRS ruling has ever held otherwise. 8128117.) All of the tax rules for hiring employees apply to resident managers, but there are a couple of special rules you need to know you pay a resident manager a regular salary, you must pay and withhold federal payroll taxes, which consist of Social Security and Medicare taxes, ­unemployment taxes, and federal income taxes. one-half of their Social Security and Medicare taxes through payrollthe employer must pony up the other half and send the entire payment to the IRS. These taxes consist of a 12.4% Social Security tax up to an annual wage limit; in 2014, the limit was $117,000. taxes are levied on all employee wages at a 2.9% rate. This combines to a total 15.3% tax employee wages up to the Social Security tax ceiling. However, you need not pay or withhold any ­federal payroll taxes on the value of free lodging you provide a

resident manager for a rental property if: It is not difficult for any landlord who hires a resident manager to satisfy these requirements. the rules, you furnish lodging for your convenience if you do it for a substantial business reason, other than providing the employee withObviously, landlords have a substantial business reason to have someone ­living at their rental property—they need a person there 24 hours a day to take care of tenants, maintenance, and security.business for sale cullman al Moreover, as mentioned above, resident managers are required by law inhandyman services wells maine The condition of employment test is met if youbusiness for sale glenbrook

require the employee to accept the lodging because they need to live at your rental property to properly perform their duties. of resident managers’ duties require that they live at the rentalIt’s a good idea to have a written employment agreement with a resident manager, including a clause requiring the manager to live atThis clause can simply say: “In order to properly accomplish the duties of Resident Manager, Employee is required to live at Employer’s rental property at [address] as a condition ofbusiness for sale mudah penang Example: Anne owns a triplex. four seasons handyman services chicago rents two of the units to regular ­tenants, but she gives John, thebusiness for sale navarre fl

tenant of the third unit, an $800 per month reduction in rent in return for his working as her resident manager. John takes care of repairs, maintenance, and gardening for the building. Although John is Anne’s employee, she need not withhold or pay any payroll taxes on the $800 in free monthly rent she pays John. Learn more about the Top Ten Tax Deductions for Landords. of, or in addition to, hiring a resident manager, some landlords hire property management companies to manage their rentals. are often used by owners of large apartment complexes or absentee landlords who live far away from their rental property. sign a contract spelling out the management company’s duties and fees. Such companies normally charge a fixed percentage—typically 5% to 10%—ofSuch fees are a deductible rental expense. E (the tax form you use to report income and expenses, assuming you file IRS Form 1040 to pay your taxes) contains a line where management

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