Running out of time for 1099s

[Juan Rodriguez]

Hello,

I've been a landlord for many years, but in 2022 we bought, rehabbed, and started operating a short term rental, so we have paid several contractors over $600. This year I also paid over $600 for property management and my CPA. Do we need to send a 1099 to all of the people that I paid over $600 in relation to our real estate work, including property manager, CPA, and home rehab/repair contractors? Most are not corporations, which I know would be exempt from needing to send a 1099. The STR is in Texas, so I assume I don't have to send the 1099 to Texas tax department, just the IRS and the contractor. Is this assumption correct?

It's worth mentioning that my wife is able to qualify as REP for 2022 tax year

And I know I'm running close to the end of January deadline, which I'm nervous about. It slipped my mind until this week. Ouch!

[Linda Weygant]

Please read the instructions for 1099s. 

While yes, it's true you're supposed to test for 1099s for anybody you paid more than $600 to, it's not as simple as >$600 = 1099!

First of all, why isn't your CPA guiding you on this?  My clients receive a full article in a newsletter or uploaded to their document portal every December.  

Here's how it works:

1.  Test for dollar amount.  Great than $600, move to step 2.  Less than, stop - no 1099 needed.

2.  Payment method.  Paid with credit card, paypal or venmo?  If yes, stop.  No 1099 needed - those processors will send the 1099K to the vendor.  

3.  Paid with check, cash, zelle or cashapp?  If yes, proceed to step 4.

4.  Request W9 from any vendor who has made it as far as step3.  If vendor a corp or S-Corp?  If yes, stop.  No 1099 needed.  If any other vendor type, then send the 1099.

Going forward - never issue any payment to a service vendor if you haven't received both W9 and proof of insurance (if a tradesperson).  In fact, don't even let them on a jobsite without both documents.