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Updated over 3 years ago on . Most recent reply

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Matthew Defore
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Cheaper contractor but no W9

Matthew Defore
Posted

Hello, I am new to REI and still crossing some bridges for the first time. My question today relates to the following scenario:

I have some kitchens and bathrooms that need to be remodeled in several of my units.  An acquaintance of mine has experience in successfully completing this type of work, however he does not do it professionally.  This person will be able to complete this work for thousands of dollars cheaper than a "professional" contractor.  However, this person would be opposed to  completing a W9. 

Question 1) Is there anything "wrong" on my side of things if I pay someone for work who does not complete a W9?  Is it fully their responsibility to handle their taxes, or could I be culpable under these circumstances?

Question 2) If I do pay this person without receiving a W9, does this prevent me from claiming my payment to him as a tax-deductible expense? 

Question 3) In your opinion, is there a point where the price savings could be so great that you would consider it to be worth the consequences of not having a W9 from the contractor? (assuming that this is not illegal)  To use an exaggerated example, suppose the non-W9 worker will complete the work for $5000, whereas a professional would charge me $15,000.  

For the purposes of this question, assume that the non-W9 worker's quality of work is equal to a professional's.

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Wayne Brooks#1 Foreclosures Contributor
  • Real Estate Professional
  • West Palm Beach, FL
13,508
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23,418
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Wayne Brooks#1 Foreclosures Contributor
  • Real Estate Professional
  • West Palm Beach, FL
Replied

@Bryan Devitt Anyone,  of a Corp/entity  you pay more than $600 to for services you plan to write off Must receive a 1099 from you, in order for you to deduct the expense......thus you need a w-9 for the correct information.  You Can issue the 1099 and state “the receiver of the money refused to fill out the W-9, but the the guy gets a 1099 which is what he was trying avoid to begin with.

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