I'm trying to get a firm handle on who (and why) certain companies / businesses get 1099s and others do not. Assuming I paid each vendor / company more then $600 during the course of this year and the vendor provided me legitimate receipts, which scenerios am I required to sent a 1099 to the company and IRS?

1) Lowes and Home Depots.

2) Local hardware store (supplies only).

3) Property insurer (independent agent).

4) Snow plowing if business is an LLC (sole proprietor).

5) Interest and principle paid to previous landlord (owner financing).

6) Remodeler / window installer who annotates "Inc" on invoice.

7) Handyman who has a State of PA business license.

Is a Handyman a "business"?

My CPA would tell me to 1099 the Handyman, I believe, just to be "safe."

Of course, I think Marv here would tell you that you don't have to 1099 anyone because you're not a business, but that is something we've discussed to death, I think. So, make your decision and, if you want to be "safe", I think I'd 1099 the one non-business on the list.

- John...

Of course, if you're asking this at the end of the year, clearly you don't know if they have an EIN or SSN. :)

- John...

I agree with Don. As we've discussed before, Marv's view requires you to ignore instructions on the back of the 1099 form that try to define what a business is and/or who has to issue 1099s. So, Marv may very well be right -- but I just don't feel right ignoring the instructions on the back of the 1099. Not worth it to me when we appear to be talking about issuing maybe ONE 1099 in the situations above (to the handyman).

- John...

Question asked in Tax Questions, which no one has answered.

No, I have not charged my husband's labor at all these 3.8 years of owning the 4 plex. I am only asking the questions on labor paid out to someone and repair materials. Can materials like Lowes' and Hd, put under repairs, and have never sent them a 1099. Should I have done that according to IRS? Hope not, I think ridiculous. Like HD and Lowes not paying taxes, that would be stupid. Good question on if you can claim your husband for his labor. Amounts are less than 4000 a year.

Does anyone know if this is a law on 1099's for over 600 and what year did the law start? I have done turbo tax for year 2011 and 2012. Did not send 1099's. Tax lady for 2010 didn't say I needed to and worked for the IRS. She was charging $300 and decided to do myself next two years. The IRS site does not breakdown what exactly depreciated in the 5 years and what would be a repair. But, I think a/c, tile flooring, kitchen, maybe is a 5 yr breakdown. Don't know exactly 27.5 yrs (what would be in that bracket) except for depreciation on the bldg. or big expenses, maybe roof. Just

guessing.

Can't wait for all that work. Not only this property, but purchased a SFH I will need to figure. My husband did do work, but possibly it wouldn't do any good because then I would need to pay social security and how would that work on adding the amount on to income? I am babbling on, but someone that knows can please give us an input.

1) Lowes and Home Depots. - No, they are corporations.

2) Local hardware store (supplies only). - No, 1099 is only needed for services.

3) Property insurer (independent agent). - Probably not, the insurance company is probably a corp.

4) Snow plowing if business is an LLC (sole proprietor). - Yes, an LLC is not a corp. Get a W9.

5) Interest and principle paid to previous landlord (owner financing). - No, you do not need to report interest paid.

6) Remodeler / window installer who annotates "Inc" on invoice. - No, as long as you have a W9 or other proof of incorporation.

7) Handyman who has a State of PA business license. -Yes, get a W9.

Depending on how you operate your business/investments you may or may not be "in business" under the tax code and may not need to send any 1099s at all. There is no penalty for sending a 1099 that was not required, there is a penalty for not sending a 1099 that was required.

What about a Kitchen cabinet and countertop/granite materials and labor together? Has a business in a store. I wasn't thinking I would have to find if they are incorporated. I gave them a (2)checks 690 and 677. Included the granite, sink, and labor. The labor could be over 600, but I don't know and I don't even have a breakdown. You mean

Indeed -- you aren't separating things out. You simply send a 1099-MISC for the total of all "cash and check compensation payments" that you sent to them. It doesn't matter if it was for goods or services/labor.

Also, to clarify on something Kyle said above since I didn't list the LLC as a "Yes" before (but I should have -- I was wrong). SOME LLCs you have to 1099 and some you do not. So, for an LLC, you'd have to give them the W-9 to fill out so that you could see if you have to issue a 1099 for them. (If they are a Type C (Corporation), then you do not have to issue the 1099.)

So, I still say "yes" for the Handyman -- and "probably" for the LLC (so you'll need a W-9 to find out).

- John...

To be clear, it isn't if a single check was over $600. It is if the TOTAL PAID to someone in the entire year is over $600. So, if you wrote checks for $200, $300, and $150 all to the same contractor during 2013 -- even if they were months apart when you wrote them and even though none of those checks is over $600 -- you would still have reached the $600 level because those total $650.

Now, you said to "the granite company." If they are a BUSINESS, then you don't have to issue 1099s at all. As long as you are sure that they are a real business. Did you write the checks to "Granite Company, Inc." or to "Bob Jones"?

As for how to handle it in the future... What you "should" do is give them a W-9 the first time they do work for you. The W-9 will indicate whether or not they are a business or not -- and therefore tell you if you should issue a 1099 to them or not. To be honest, I think most of us don't bother to do it -- especially for places that we feel we can safely assume are businesses anyhow.

But, yes, if you are just hiring some independent contractor to install some countertops -- and you write checks to him total at least $600 during the course of a year -- then you should likely have had them fill out a W-9 and then issue a 1099-MISC at the end of the year.

- John...

P.S. I am not a lawyer. Your mileage may vary. Look both ways before crossing. Do not divide by zero.

Agreed -- I said "business" when I intended "corporation."

My point was that you pretty much have to get a W-9 from them to tell in many cases.

- John...

yep, just found this write up in my saved files.

Who should I give a W-9 to? This is an important question because I received numerous complaints from people who were asked to complete a W9 form. Basically, if you’ve done work for a business and they’ve paid you over $600 you should just hand them a completed W9. That was the instruction I was given by the IRS for my own company. You might think you’re not self-employed, or that you don’t have a business—but if you are doing work, getting paid, and not on the payroll; that means you’re self-employed.

Is there any way to avoid having to complete a W-9 form or issue a 1099MISC? The easy way to avoid having to issue a 1099 MISC (and collecting a W9 form) is to pay by credit card. Credit card companies are now issuing 1099K forms so that revenue to the vendor is already being reported to the IRS by another reporting agency. If you don’t want to be collecting W9 forms and issuing 1099s, then use your credit card. This is the easiest way to avoid 1099MISC and W9s, but remember that there are lots of fees associated with using credit cards. As my Mom used to say, “Pick your poison.”