2019 Tax season is upon us and I am about to complete my first flip (hopefully closing soon). Since this is my first flip I am now (in April of 2020) just finding out about the W-9 form we need to ask contractors to fill out in order to use the payment made to them as an expense. I have receipts but now I am stuck on whether I should be asking for it now and sending the 1099 copy to the IRS. Also I bought this flip in November of 2019 and I haven't technically sold it yet so not sure what this would be classified as for year ending 2019. Any advice from experienced investors would be greatly appreciated!
It’s reported as part of the year you sold it. So, if you sell it in 2020, it goes in the return you file by apr 2021.
You should be getting w9 upfront technically. 1099 are due by end of January... so, unless you had reportable expenses through 2019, you have until this coming January for all the expenses in 2020.
Just remember flips are considered active income so you will have to pay self employment tax and it’s taxed as income/wage, not capital gains