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If I hired a plumber to remodel a bathroom on my rental side, why must I 1099 him?

 
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3 Replies
jtax
Level 10

If I hired a plumber to remodel a bathroom on my rental side, why must I 1099 him?

Because your rental is a business and the IRS wants to make sure the plumber will report what you paid them as income.

 

For more info see articles like this: 

 

https://www.nolo.com/legal-encyclopedia/do-landlords-need-to-file-form-1099-misc.html

 

There are a number of exceptions, such as payments to Corporations (C-corps, S-corps, or LLCs taxed as corporations.) See https://www.irs.gov/instructions/i1099msc#idm140364727514192

 

TT Home & Business should be able to generate the 1099-NEC for you but other services can as well.

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RaifH
Expert Alumni

If I hired a plumber to remodel a bathroom on my rental side, why must I 1099 him?

The IRS requires a 1099 for payments above $600 to those who perform services with a few exceptions that can be found on the instructions to the 1099-MISC. Failure to do so or filing past the January 31 deadline can lead to penalties

 

In addition to it being required, it justifies the expense you are taking on your rental and creates a paper trail to ensure the plumber reports their income. 

If I hired a plumber to remodel a bathroom on my rental side, why must I 1099 him?

If you hired a plumber to remodel a bathroom on your rental property, you may need to 1099 them for tax purposes. It's often required for independent contractors or self-employed individuals. To understand the specifics, you should consult a tax professional or visit websites like newyorkplumberdrain.com for insights tailored to your area. They might have valuable information about the legal and financial aspects of hiring contractors in New York.

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