Re: Who Fills It Out? - Landlord Forum thread 323596

Re: Who Fills It Out? by Kim (WV) on August 30, 2014 @23:25

KatieKate is correct except in one particular. The cut off is $600 (unless it has been changed since last year). Anyone you pay (company or individual) for goods or services $600 or more during the calendar year, you should send a 1099.

I don't mean merchants like Lowes or the local hardware or paint store though. I mean people like: the guy who does your mowing on your rental; the guy that put in your new sidewalk on your rental house; the person who did your roof repairs on your rental house; the person who helped clean out the rental and prepare it for the next tenant; the person who constructed the built-in bed in the rental house, the local landscaping company who built a retaining wall at one of your rental houses, etc. In other words, all those independent contractors who work on your rental properties.

You should have everyone who does work on your rentals who you anticipate you will be paying $600 or more in the course of the year fill out a W-9 before they do the work. That way (1) they know ahead of time they will be getting a 1099 from you and the income will be reported to the IRS and (2) you won't be scrambling around in January trying to pry information you need out of them in order to do the 1099. (Been there, done that, contractor wouldn't respond, had to send in form without SSN--there's a procedure to follow if you don't have the SSN but it's a pain in the neck).

Some contractors don't like getting a 1099 and won't work for you because they don't want to have to report their income and pay their SSN and income taxes on it. It's best to know this upfront, before you hire them. It's one of the questions I ask a contractor before I work with them. If they won't do things on the up and up (fill out a W-9, agree to pull permits when needed, be licensed (when it's required) and so on, then I move on and find someone who will.

I pay my taxes and do things legally and I don't want to deal with those who don't.

The 1099 is a very simple form and takes very little time to prepare. Basically all you need, if memory serves, is their name or the company name, the individual's SSN or the company TIN (taxpayer identification number); the mailing address of the individual or business; and the amount you paid them during the year. That's pretty much it, besides your name, SSN or TIN, and address.

An accountant or CPA isn't a bad idea. But if you want to do it yourself, TurboTax has a program for preparing tax returns for those that have rental property. My husband does the taxes (I do the 1099s though) and he's been really happy with it.

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