How do you handle cash payments (lawn, etc) and taxes?

General Landlording & Rental Properties
8yFollow

How do you handle cash payments (lawn, etc) and taxes?

Steve S.
Dallas, TX · Member since 2014 · 650 posts · 53 votes

If a neighborhood kid mows your lawn do you 1099 them?  What's the impact of not sending the 1099?  Do you lost the payments on your expenses?

0Reply
28 views

Most Popular Reply

Logan AllecBusiness Member
Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
8y
Landlords issuing 1099s is a grey area. There is no strict requirement for landlords to issue 1099s, and I have never heard of the IRS going after landlords for failure to file 1099s. That being said it does not necessarily mean that 1099ing your contractors is a bad idea. And remember the 1099 threshold for something like mowing lawns is $600 for the year per recipient.
Clarita CPA Group516 Reviews
WebsiteView Page
1Reply
See this reply in the discussion

6 Replies

Jump to latestLatest
  • Logan AllecBusiness Member
    Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
    8y
    Landlords issuing 1099s is a grey area. There is no strict requirement for landlords to issue 1099s, and I have never heard of the IRS going after landlords for failure to file 1099s. That being said it does not necessarily mean that 1099ing your contractors is a bad idea. And remember the 1099 threshold for something like mowing lawns is $600 for the year per recipient.
    Clarita CPA Group516 Reviews
    WebsiteView Page
    1Reply
  • Logan AllecBusiness Member
    Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
    8y
    The issue is whether one's real estate activities rise to the level of a trade or business, which they don't for the vast majority of BP landlords. Now if real estate is your full-time thing and you're a real estate professional, you should consult with a CPA on this matter, but if you just have a handful of rentals that you manage on the side, no, you don't need to issue 1099s.
    Clarita CPA Group516 Reviews
    WebsiteView Page
    0Reply
  • Steve S.
    OP
    Dallas, TX · Member since 2014 · 650 posts · 53 votes
    8y

    Thanks. Does not issuing one affect how much I can expense?

    0Reply
  • Logan AllecBusiness Member
    Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
    8y
    No.
    Clarita CPA Group516 Reviews
    WebsiteView Page
    0Reply
  • Patrick M.
    Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
    8y

    If I pay cash for something I don’t put it any where near my taxes (with very, very limited exceptions). If I would be claiming someone’s services I pay by check and get their social. 

    My expenses are backed up by receipts and done via credit card or check.

    0Reply
  • Jimmy Dudley
    Real Estate Broker · Westminster, MD · Member since 2017 · 159 posts · 101 votes
    8y

    I don't know how much you are paying the kid to mow your lawn. Have you considered writing the kid a check and using that as a record of payment? 

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free