Do I need to include on my return the 1099-NEC that I sent to a contractor that did repairs on my rental property? If so, how do I do that in TurboTax?

Forum|Forum|3 years ago
February 28, 2023
2 replies
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Also, what do I do if I am unable to obtain a TIN/EIN for the contractor's business?

TurboTax Premier Online

Bsch4477

Employee

He doesn’t send you a 1099-NEC. You just deduct the cost of repairs along with your other deductions for your rental property. Keep the invoices in your files in case of an audit.

DavidD66

No, you don't include Forms 1099-NEC that you send out. You would check the box on Schedule E to indicate you made payments that required a 1099-NEC and that you sent it/them.

You can issue a 1099-MISC without the tax ID number; however, you must make a formal request to the subcontractor for his tax ID.

If you do not have the Social Security number by the time to file Forms 1099-MISC, you should leave the identification number box empty, but still submit the report to the IRS.

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floridalandlordTV

My research seems to indicate that if you pay them electronically by Venmo, Zelle, etc, that you don't need to send a 1099-NEC. There seems to be a lot of disagreement online about this. It also sounds like if you are not trying to qualify as a business for tax purposes that the 1099-NEC is not necessary anyway. Lastly, still not sure if online bill pay like I use for some things qualifies as "electronic payment". Thoughts? Have never sent these before and have been a landlord since 2014.

If I do have to send one, can I send one for all my properties combined or do I have to send one for each property?

Thanks in advance

LindaS5247

To clarify, are you asking if you have to issue a Form 1099-NEC to contractors you have paid or do you have to report Forms 1099-NEC issued on your own tax return?

You are engaged in a trade or business if you operate for gain or profit. If you are a landlord, then you are engaged in business to make a profit.

Per IRS requirements, if you pay independent contractors, you may have to file Form 1099-NEC, Nonemployee Compensation, to report payments for services performed for your trade or business.

File Form 1099-NEC for each person in the course of your business to whom you have paid the following during the year at least $600 in:

Services performed by someone who is not your employee; (including parts and materials) (box 1); or
Payments to an attorney (box 1).

You must also file Form 1099-NEC for each person from whom you have withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

If the following four conditions are met, you must generally report a payment as NEC.

You made the payment to someone who is not your employee.
You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
You made the payment to an individual, estate, or, in some cases, a corporation.
You made payments to the payee of at least $600 during the year.

Report on Form 1099-NEC only when payments are made in the course of your trade or business. Personal payments are not reportable.

You would issue them per contractor (each contractor you have paid) for the tax year in question.

Payments made through Venmo are considered income to the contractor you paid.

Click here for instructions for 1099-NEC.

Click here for additional IRS information regarding reporting payments to Independent Contractors

Click here for what happens if you forget to file a Form 1099 on your tax return.

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