21 Mar 1099s Are Real Estate Investors Required to Issue them to their Subcontractors?
Are Real Estate Investors required to issue 1099s to their subcontractors?
Sorry to disappoint you but I am not going to render any tax or legal advice in this article. Tax laws change every year. One year the IRS is adding 26,000 new agents and they are coming after small business. The next they are short staffed and can’t take everyone’s phone calls.
My advice is to be prepared. Collect and track your subcontractors Tax ID numbers. Going through the hassle of sending out 1099s might not be a bad idea.
The only guarantee is that the year when you don’t’ send them will probably be the year you should have.
What I can tell you is that the Income Tax Preparation software used by many tax preparers “ASKS” two questions on every Schedule E Rental Income form:
1. Did the taxpayer make any payments in 2014 that would require them to file Forms 1099?
2. If yes did they or will they file all required Forms 1099?
Those two little questions worry me enough that I always file forms 1099 for anyone I pay over $599.00 in a calendar year. The choice is yours!
Every Landlord has heard about the possibility of forgiving a deadbeat tenant’s debt and sending them a Form 1099-C when the judgment is uncollectable. What would happen if the tenant so treated decided to file a lawsuit against you and could prove they were the exception and not the rule? Could they prove you were being malicious in your actions to punish them? Again this is not tax or legal advice, just a discussion.
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