Contractor doesn't want Payment Reported to IRS. Will I be able to take deductions?

[Saji Ijiyemi]

Hello -- I need to do a major rehab on a rental property that will cost about $50k-60k but the contractor does not want 1099 and wants nothing to be reported to the IRS. I want to be able to claim deductions. For tax purposes, can I still claim deductions if I don't give the Contractor 1099? Will the IRS want to know who I paid the money for the major repairs? I will appreciate your help. Thank you.

[Bruce Woodruff]

DO NOT use a Contractor (if he even is one?) who starts off the project by cheating and asking you to cheat as well. Is that the kind of relationship you want to be involved in?

Just because his past work looks good means nothing. Have you seen the past projects in person? Or just seen pics on his phone? Be very very careful with a guy like this....

But to answer your question - No you cannot dodge the reporting of a large sum of money to a Contractor. If/when the IRS finds out (and they will), they can fine and penalize you as well as him for failure to report.

First thing to do is to check his license status. I'd be surprised if he is licensed. https://dllr.state.md.us/cgi-bin/ElectronicLicensing/OP_Sear...

Go find a real contractor, who is legit and does things right. Yes you will pay more. Get over it and play by the rules.