pk
Level 15
Level 15

Investors & landlords

@Shuja  not wanting to beat a dead horse  and having gone through replies from @Hal_Al and @Carl ,  here is something to consider :

(a) the purpose of the rule by the IRS is to tap into the underground economy --- where small independent  workers earn an amount but do not report  the income on their returns  ( actually , as a volunteer to the treasury I heard this being discussed by Neena Olsen, the taxpayer advocate, when she visited Argentina and learned how  there  each and every sale  results in a tax receipt that both the  buyer and seller must report -- thus cutting off the  grey economy )  -- thus not paying the IRS and the State and also not paying the 15.3% net to the SSA

(b) what IRS is trying to do is make you responsible for ( and paying the extra 15.3 % that the worker would have to pay when income reported ) being their watchdog -- especially since  the rule applies only for payments to  independents ( presumed to be untrustworthy in the land  of innocence till proven guilty ) but not to businesses  ( whom are always  to be trusted  because they probably know better or have CPAs involved , whom are  surely trustworthy, never mind that almost all the  tax-preparers  sanctioned by the  IRS are all CPAs

(c) As @Carl  mentioned  , you employed a person to do the work, you paid them and  really , how he/she does  or does not report the income really is beyond your control unless of course you choose  to pay extra  ( because the worker surely will have to charge extra for the privilege  of paying SSA )

 

But you are correct that the rule  ( not the law ) requires  you to issue 1099-misc  and  TurboTax as a responsible  service provider has to ask the question.

 

that is my view