Do I need to file a 1099-MISC?

[Brian Pleshek]

Greetings everyone.  

I've had a SFH rental for over 15 years and have always done the work myself or paid a company like RotoRooter to do the work. This past year, I acquired another property and put in 15k-20k in updates, but this time, I used a contractor. This is a "guy" I found in home depot and he agreed to do the work. He works for others, so I don't think I need to deal with the issue of whether he's w2 or 1099. But my question is, do I need to file a 1099-MISC? My wife doesn't think so but I'm thinking we do since we gave him more than $600 last year.

Assuming that I do have to file it, how do I do it?  I can go down to staples and get a form and put it in the mail to him.  But do I need to send it certified or return receipt to prove that I sent it?

As far as filing with the IRS, do I do that electronically or do I just mail in a copy to them as well?

Thanks,

Brian

[Ronald Perich]

Originally posted by @Brian Pleshek:

Greetings everyone.  

I've had a SFH rental for over 15 years and have always done the work myself or paid a company like RotoRooter to do the work. This past year, I acquired another property and put in 15k-20k in updates, but this time, I used a contractor. This is a "guy" I found in home depot and he agreed to do the work. He works for others, so I don't think I need to deal with the issue of whether he's w2 or 1099. But my question is, do I need to file a 1099-MISC? My wife doesn't think so but I'm thinking we do since we gave him more than $600 last year.

Assuming that I do have to file it, how do I do it?  I can go down to staples and get a form and put it in the mail to him.  But do I need to send it certified or return receipt to prove that I sent it?

As far as filing with the IRS, do I do that electronically or do I just mail in a copy to them as well?

Thanks,

Brian

 While I won't disagree with a tax professional, I'll ask you why wouldn't you do it anyway? You now own two rentals, not one. The IRS might decide you qualify as a business venture, not an investment. Better to be safe in my opinion.

If you paid by credit card, then you don't need to file. The card companies are required to file a form and will take this off your plate. Same with companies (but not LLCs or attorneys). But "a guy from Home Depot" probably didn't take your Visa as a payment and likely isn't running his own S-corp.

As far as filing, you might consider this as the year to get a CPA involved with your taxes. Especially since you now have a new property. You might be missing out on important deductions like accelerated depreciation on some of those updates you did. Or the CPA might help prevent you from claiming a depreciable item as an expense, which could get you into fine territory.

A CPA can knock these things out with one calculator tied behind their back.