When do I need to generate a 1099?

Question

Could someone clarify when I need to issue a 1099?

1.  I hire a contractor to install A/C in my rental.

2.  I hire someone to rake the leaves in the yard.

3.  I hire a landscaper to mow the lawn every week.

Is an invoice the determining factor?

Lesley Resnick · Answer

They just went out in the mail today.  I was going to do it myself, but printing out the red ink is a problem.  I had my accountant do it.

Andrew S. · Answer

Remember too that the deadline for sending the 1099s and filing the associated 1096 with the IRS is January 31, so you only have a few more days.

On the upside, if any of your repients are incorporated (think Lowes, HD, etc), those are excempt (no need to send 1099).

Penalties for not filing or late filing can be quite significant.   Also note that you cannot simply download the 1096 - it has to be the IRS printed form, so if you don’t already have it ordered, your only way to make the deadline is to file electronically (for a fee)

Lesley Resnick · Answer

I had no idea it was so onerous.  I have a many contractors that I have spent more than $600.  How do people manage this?  It seems like it will take more time than actually keeping the books.

Ned Carey · Answer

@Lesley Resnick see the link in the above post.

Generally more than $600 paid to any

• Lawyer - regardless of reason
• contractor who provides services 
• individual who provides services
• Unless those payments are to an incorporated company. Keep in mind you must report payments to LLCs
• Interest paid over I believe $10.00 (or maybe $100.) has to be reported.
• Buying materials & supplies does not have to be reported.

You report both to the person that received the money and to the IRS

That is the basics. Again see the link above or  other IRS sites for details.

Steve Wilmers · Answer

Hi @Lesley Resnick,

https://www.irs.gov/businesses/small-businesses-se...

Above is a link to the IRS page providing guidance on this.  Whether there is an invoice or not, if a sum of payments to the individual/business total more than $600 during the year a 1099 is likely required.