End of project/flip - what documentation do I need?

[David Green]

I am wrapping up my flip and was wondering what type of payment documentation I will need for both legal and tax protection.

The project involved a GC, electrician, plumber, and granite vendor.

Do I need to get waivers from all these guys?

I found this form online that seems to be sufficient.

http://www.cslb.ca.gov/Resources/MechanicsLien/ConditionalWaiverAndReleaseOnFinalPayment.pdf

Also, what do I need for taxes? I read that I might need a W9 filled out by each contractor? Is this mandandory per the IRS?

Thanks

[Daniel Hyman]

@David Green you will certainly want to send 1099's to all necessary parties. I posted this in a different thread, but I'll add it here as well:

If your business made payments to an independent contractor of $600 or more during the course of the year, you are required to issue a form 1099. Much like a W-2 is issued for an employee, a 1099 is sent to an independent contractor. Contractors can be individuals or companies. You do not need to send a 1099 to most corporations. The information needed to fill out a 1099 can be taken from from the contractor’s W-9. Total payment should be entered in box 7 of the 1099. The deadline for sending 1099’s is Jan 31 – the same date as W-2’s for employees. Penalties for missing the deadline range from $30 $100 per form. Form 1096, which summarizes the totals for all 1099's, must be provided to the IRS no later than March 31. Be sure to keep a record of all your filings. The best way to ensure correct filing is to have accurate bookkeeping and records. And always consult your accountant for further guidelines and instructions.