Last your I spent about 17,000.00 on bath remodel for a rental property and other repairs what do I give the handyman a 1099? How do I get the 1099?

Forum|Forum|6 years ago
June 3, 2019
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JulieH1

If you are an individual property owner with rental properties you don’t have to issue a 1099 under the current law.

The general rule is that if you are in a trade or business you need to issue a 1099-MISC to self-employed individuals if you pay them $600 or more in a given calendar year for services.

If you are in a trade or business, you do have to issue a 1099-MISC to self-employed handymen, gardeners, and tax preparers. The rule is you need to get the Tax Identification Number or Social Security number by handing them a form W-9 to fill out and give back to you. This form will provide the information you will need to issue a 1099-MISC at the end of the year.

In terms of current rules the real issue is whether you, as a rental property owner ,are considered to be in a trade or business.

If you own a couple of properties as an individual you are not considered to be in a trade or business for the purposes of this law so you don’t need to issue 1099 to your handyman. If you and your spouse own the property together you don’t have to issue a 1099.

If you own the property in an LLC where you are the sole owners the LLC is disregarded and you don’t have to issue 1099s.

If you own the property in a partnership or corporation with partners other than your spouse you are deemed to be in a trade or business and the entity needs to issue 1099s if you reach the $600 or greater threshold in terms of payment to a contractor.

If you are the property manager that manages other owners’ properties you are required to issue 1099s as you are in the trade or business of property management.

Smussle

Thanks for the information!

Can you give me a link to where you read this information either in TurboTax or IRS?

Anne

JotikaT2

Please see the attached link from the IRS to read more about Form 1099-MISC.

IRS Form 1099-MISC information

Also, please see the following link for more information on how to generate the forms using TurboTax if you determine you do need to generate and issue the forms.

Creating 1099 Forms

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Smussle

It states in this 1099-Misc who has to file:

Trade or business reporting only. Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit. However, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements. Other organizations subject to these reporting requirements include trusts of qualified pension or profit-sharing plans of employers, certain organizations exempt from tax under section 501(c) or (d), farmers' cooperatives that are exempt from tax under section 521, and widely held fixed investment trusts.

So you are required to with this Statement...

”Personal payments are not reportable. You are engaged in a trade or business if you operate for gain or profit.”

listed in 2020 and 2021 1099-misc

DaveF1006

It depends. According to the following Turbo Tax article, you do not need to issue a 1099 MISC for payments made to a contractor for your rental property. This has been in effect from year 2012 going forward.

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Carl11_2

Employee

The only reason I can see for a rental property owner to issue a 1099 when rental property is not their primary trade or business, is if they will be claiming the QBI deduction. Other than that, there's no reason for it.

I've been a landlord for 30+ years with three rental properties, and have never issued a 1099. I also don't bother with the QBI deduction since it's not directly and immediately beneficial to me.

Smussle

I have rental properties in my name, then last year bought 2 under a single owner LLC.
I read in previous post communication, no need for 1099 misc. from LLC either. My brothers accountant says he needs to Issue personal and LLC 1099’s

Carl11_2

Employee

My brothers accountant says he needs to Issue personal and LLC 1099’s

Ask your brother's accountant to show you that in writing, on the "official" IRS website which is the only place where you can find the most correct "official" IRS rules and laws. I'm not saying that to be rhetoric either. It's perfectly possible that laws may have changed we're not yet aware of.