W9 and 1099 form for contractors

7 Replies

Dear All,

I have one rental house that is not in an LLC. Last year I remodeled this rental house. Total remodel costed about $164k. Do I need to have w9 from contractors and issue a 1099?

Thanks

Hoang

Originally posted by @Hoang Nguen :

Dear All,

I have one rental house that is not in an LLC. Last year I remodeled this rental house. Total remodel costed about $164k. Do I need to have w9 from contractors and issue a 1099?

Thanks

Hoang

If you only have one rental house and no other RE business - then you don't have to. But it's a good idea to do it anyway. Going forward, I recommend you collect SSNs before the contractor starts, as it is next to impossible to do it after the fact.

Originally posted by @Hoang Nguen :

Dear All,

I have one rental house that is not in an LLC. Last year I remodeled this rental house. Total remodel costed about $164k. Do I need to have w9 from contractors and issue a 1099?

Thanks

Hoang

My CPA always tells me to make sure I get a W9 filled out and do 1099s for those that don’t operate as a corporation. Anything totaling greater than $600 should get a 1099.  

You should send a 1099 to any service provider that you paid over $600 to during the year unless the service provider is a corporation. You generally need to get a W-9 first- most contractors aren’t fond of filling them out since it means the IRS will now about their income.

As a general rule, if you aren’t sure whether you are required to send them out or not, send them out. There is no harm to you in sending out unnecessary 1099s. There is to not sending out necessary 1099s.

Thank you for your quick response.

The remodeling was done. I can not get SSN from contractors, But I have invoices and receipts. Do you think, it works for IRS?

Thanks

Hoang

Originally posted by @Hoang Nguen :

Thank you for your quick response.

The remodeling was done. I can not get SSN from contractors, But I have invoices and receipts. Do you think, it works for IRS?

Thanks

Hoang

Like I said, try to get it upfront next time. Getting them after the fact, as you experienced, is a long shot.

What @Brian Schmelzlen described is correct, and it applies to "trades and businesses." Managing one rental house usually does not qualify as "trade or business" - this is why you're not required to send 1099s. 

It's still a good business practice to do so in the future.

Receipts and invoices are good to prove your deduction in case you're audited. They are useless for 1099s.

I always make sure to get 1099's filled out at contract signing or by the time I give the final check. As most mentioned its very difficult to do this after the fact. I would encourage you to do as it is a good practice. 

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