Issuing 1099s to contractors

9 Replies

Hi. Do I need to issue 1099s to contractors that did standard renovations over $600? Thanks

If they are not incorporated and the work was $600 or more. It's what I did for my 2 contractors that operate under an LLC and as a person doing business.

@Bob Stein

Yes, and hurry - the deadline was Jan 31.

Exceptions to that requirement:

  • If the work was done on your personal property
  • If the work was done on your rentals (grey area, and I recommend filing 1099s anyway)
  • If they are corporations (not the same as LLC!)
  • If you paid electronically, as in PayPal

As a side-note: I used to use TurboTax to create, print, and electronically file 1099's with the IRS - HOWEVER, TurboTax has now decided we need to buy their $200 version in order to maintain this functionality.  Did a little research, and found efile4biz.com .... was super cheap to use, and they even mailed hard copies out to my sub-contractors (no need for me to print and mail), then automatically e-filed with the IRS.  Good Luck.

@Michael Plaks

Being that the deadline already passed and the work was for a rental, should I just skip it? Also, what happens if I do work and the contractor doesnt want to give me their tax info, or if they operate as a sole prop and wont give their ssn? Thanks

Originally posted by @Bob Stein :

@Michael Plaks

Being that the deadline already passed and the work was for a rental, should I just skip it? Also, what happens if I do work and the contractor doesnt want to give me their tax info, or if they operate as a sole prop and wont give their ssn? Thanks

Moving forward, require a completed W-9 before you ever issue the first payment.

@Ryan Murdock

Is that standard practice, that anyone doing work over $600 fills out a w9?

@Bob Stein It is fairly standard and you can download a W9 right from the IRS website.

I have anyone who qualifies for a 1099 complete a W9 before I issue them their first payment - even if the job is less than $600 just in case I have them do additional work later on. Getting the paperwork out of the way on Day 1 is much easier than scrambling around chasing people this time of year.

Originally posted by @Bob Stein :

@Ryan Murdock

Is that standard practice, that anyone doing work over $600 fills out a w9?

Yes, it should be standard practice, but it is ignored by most. Then they have the exact problem you described: no way to obtain tax IDs after the work was paid for. It should be a condition for getting paid. Better yet, a condition for being hired, i.e. before starting work.

Without SSNs you have no way of filing 1099s. Since they were rentals, you won't be breaking the law by not filing. Going forward, I recommend that you start collecting W9s and filing 1099s.

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