topic Didn't issue a 1099 in Deductions & credits

Didn't issue a 1099

MG26 — Thu, 26 Mar 2020 19:23:54 GMT

So I didn't issue a 1099 to a contractor. He didn't break down the labor and materials for me. The amount is $705. Turbotax asked me if I failed to send out. I answer yes. I am wondering how this is handled. Will the IRS be notified of my mistake to trigger a possible audit or am I just penalized a $100 or what? I believe I can still claim it. In my research I find that it is commonly thought that I can't deduct it and this is not true as nothing stated in Section 162 or Cohan requires a Form 1099 to be issued for a subcontractor labor expense to be deducted. I just have to prove the expense if audited.

Re: Didn't issue a 1099

AmyC — Thu, 26 Mar 2020 19:41:34 GMT

On your business forms, it has a place to mark that you failed to send the form. You can still send it. Late would be better than never. See how to to file a 1099-MISC here. with us.

Yes, you can still deduct the expenses with your proof of payment for audit backup.

Re: Didn't issue a 1099

MG26 — Sat, 28 Mar 2020 19:49:51 GMT

I can't find the place where it asks me if I need to issue a 1099 and whether I did. I need to change the answer now that I found the itemized labor/material invoice. The question is not there anymore. Please tell me the navigation.

Re: Didn't issue a 1099

MaryK4 — Sat, 28 Mar 2020 21:54:46 GMT

Go to the Self-Employment section and look for General Info, then look for Required to send a 1099

@MG26

Re: Didn't issue a 1099

MG26 — Sat, 28 Mar 2020 21:47:56 GMT

Thank you so much but I thought I answered the question for real estate rental section and not self employed section. Also, it turns out I don't have to send 1099 because I'm not a real estate professional. The 'general' area does not appear in the real estate section. Is there another place where I can check for where I said I needed to send a 1099? So sorry and thanks.

Re: Didn't issue a 1099

MaryK4 — Sat, 28 Mar 2020 22:00:02 GMT

You would go to the Rental section and look for the "Did you Pay Anyone $600 or More for Work Related to This Property?" (there is no summary page like for the self-employment). You may need to send 1099-MISC even if you are not a real estate professional, usually if you pay a person $600 or more for the year.

@MG26

Re: Didn't issue a 1099

MG26 — Sat, 28 Mar 2020 22:18:50 GMT

Thanks again, I finally found it in the Property Profile section. I was looking in the Expense section. So the following historic question/answer by a turbotax person would not be accurate for a non-professional passive income landlord?

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I hired contractors to do repair work on my rental property in 2017. do i need to complete a form 1099-misc for this?

Re: Didn't issue a 1099

MaryK4 — Sat, 28 Mar 2020 22:30:27 GMT

You are correct- you do not have to file the 1099-MISC if you are self- managing the property. When you said Real-Estate professional, I was thinking of the Schedule C requirements.

@MG26