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.
