1099 NEC to LLC S Corporation

[Zuez]

Hi, I have a rental property in Florida through Airbnb. In 2024, I paid $1,200 in cleaning fee to and LLC S Corporation. If I don't have to send a 1099 NEC to the S Corporation, when preparing my taxes using TurboTax do I have to answer NO when the software ask me if I had to issue a 1099? 

Also, do I have to provide the payments ,made in 2024 to the cleaning lady, or should I wait if it requested?

I appreciate it.

Thank you.

Zamira G.

[Shannon B1]

Yes, you're correct. You would answer "no" to the TurboTax question about issuing a 1099. 

You don't need to provide a list of payments to the cleaning lady unless she request it.

[Zuez]

Thank you.

[vcheli85]

Question - if you issue someone an unnecessary 1099 (as referenced in the above question), and then click no on the question asked by Turbo Tax regarding you issuing 1099 payments, doesn't that 1. remove that payment as an expense you could have written off, and 2. potentially cause a tax discrepancy down the road if the recipient uses that 1099 on their tax return and there is no record of it in the IRS's database? All payments you issue, whether w2 or 1099, count as an income deduction, because that's less income you have to be taxed on...

[KrisD15]

The above question was about a rental asking if they need to send Form 1099.

Taxpayers with rental property are not necessarily obligated to issue Form 1099.

Business owners are obligated.

The question was about NOT issuing Form 1099 and if they had needed to, they did not issue an "unnecessary" one.  

1. No, it does not eliminate an expense. The expense is listed regardless if Form 1099 was issued or not.

2. Again, in this question, there is no Form 1099. None was issued. But regardless, the IRS gets a copy of Form 1099 and looks to see if the income is reported. 

For example, if I issue you Form 1099-MISC or Form 1099-NEC reporting a 1,000 payment, the IRS will look at your tax return and make sure you are entering at least 1,000 business income. (Then you might report 600 in expenses so the profit would only end up being 400.)

Again, you are correct that when a business pays someone, that becomes a business deduction which lowers taxable income, but you don't NEED a tax form to claim the expense.