1099 for General Contractor: Did I make a mistake?

Question

I just realized when paying my general contractor last year, I wrote out some checks to the company and some checks to the name of the owner. Oops! I'm not sure if this matters. I intend to issue a 1099 for the total amount I paid for the project. Every check written, referenced the address of the rehab.

Steve Vaughan · Answer

From what I understand, total payments in a calendar year less than $600 do not need a 1099.  Payments above $600 made out to a corporation do not require a 1099, either.  All payments made to attorneys require a 1099.  Be sure and use only the IRS scannable 1099s you receive directly from them.  I order them from irs.gov.  No tax advice, just what I do regarding these.  Please correct me if my $600 number is outdated!

Steven Hamilton II · Answer

One 1099 will suffice. List both his person and company name on the 1099. And his  SSN

Account Closed · Answer

Hi @Belinda R. in this case I would have two W9 forms, one for the company who should have completed a W9 with the Tax ID# and another for the name of the owner personally who should have completed one with a SSN. This is how I would have handled, other investors' opinions could vary. If no tax id existed such as a DBA company it should all go under the individuals taxes anyway. Did you have the contractor complete any W9?

You probably want to check with your tax preparer on his or her opinion. Or maybe you still talk to your contractor and can get some updated W9s.

Steve Babiak · Answer

Understand why that contractor asked for checks in his own name. Most banks won't cash a check made out to a company - they will only let him deposit those. So when he has it made to him personally, it's because he wants / needs CASH ASAP, and he will be cashing that check! Even if he deposits it, he can request it to be done as cash if depositing into the same bank as where the check was drawn.  Something that might be good reason for concern ...

Peter MacKercher · Answer

Call the contractor and talk to him. Ask him how he wants the 1099 whether 1 or 2. Talk to your cpa to make sure you can do what he wants.

Gita Faust · Answer

Steve,

It is not outdated. For subcontractors it is been $600 and over with exceptions. Checkout the IRS.gov website.

Gita Faust

Belinda R. · Answer

Correction: I looked at w9 again. I have his SSN not the EIN. So Im guessing I will send a 1099 in his name not the company's.

Belinda R. · Answer

I have one W9. The W9 I had him complete has the company's EIN. I don't have a SSN. I'll be sure to get both in the future. Thanks.

1099 for General Contractor: Did I make a mistake?

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