You might need to withhold taxes if he refuses. I believe the IRS requires backup withholding at 24% if someone won't provide a TIN. Our HOA had this issue with a handyman and we basically told him "either fill out the W-9 or we have to withhold 24% of your payment for the IRS." The W-9 appeared pretty quickly after that conversation!

Thanks for that tip! I had no idea about the backup withholding requirement. That actually gives us a good way to explain why we need his information. I'll let him know this isn't just our HOA being difficult, but a legal requirement that affects his payment if he doesn't comply. Just to clarify though - we'd withhold 24% from future payments right? Not try to get back money we've already paid him?

Ugh tax classifications are so confusing! Does filing as a 528 HOA change the 1099 requirements or is that separate?

You absolutely cannot ignore it! The IRS receives a copy of every 1099-K, and their systems automatically match them to your tax ID. If you don't account for it somehow on your return, you'll likely get a CP2000 notice (automated underreporting notice) which is basically the IRS saying "hey, we think you didn't report all your income." The correct approach is to report it and then exclude it with an explanation. Most tax software (including CashApp Taxes) has a way to indicate the money isn't taxable income. This satisfies the reporting requirement while ensuring you don't pay taxes on money that isn't actually income.

Thanks for explaining! That makes sense about the IRS matching the forms. So better to report it with the explanation than to trigger an automatic flag in their system. I'll make sure to include it in CashApp Taxes and check that box saying it's not taxable income.

I managed to get Square to issue a corrected 1099-K last year, but it took persistence. The key was escalating beyond the first-level support. I had to specifically request to speak with their tax reporting department. It took about 6 weeks, but they eventually issued a corrected form. In the meantime, I filed my taxes as others here suggested - reporting the 1099-K but indicating the amounts weren't taxable. That way if the correction never came, my taxes were still accurate.

I used TurboTax last year to claim my father-in-law who gets SSDI. It asks you to enter their income including social security benefits. The key is making sure you know exactly how much is SSDI vs SSI because you'll need to enter the SSDI amount when it asks for Social Security benefits. TurboTax then correctly applies the gross income test.

Thanks for sharing your experience! Did TurboTax specifically ask you to separate SSI from SSDI, or did you just need to know that information in advance?

Did you have to go into an IRS office or was it handled by mail? I'm terrified of audits.

That's really interesting! I hadn't heard of a landlord contribution agreement before. Did your brother's arrangement require monthly payments to still be made, or was it entirely offset by the improvements? My situation is more informal - I help with utilities and maintenance but don't pay a set "rent" amount.

The arrangement didn't require full elimination of rent payments. They structured it so a portion of what would have been market-rate rent was offset by the documented improvement costs. There was still some payment happening to establish a legitimate landlord-tenant relationship, but significantly reduced. The key was having everything in writing with fair market values established for both the rent and the improvements. They also took photos before/after and kept all receipts. Their tax professional basically said the most important thing is showing this is a legitimate business arrangement, not just a family helping each other out informally. The more formal documentation you have, the better position you're in if questions come up.

Doesn't the IRS also have some kind of recapture rule if you claim these credits and then move out or sell within a certain time period? I feel like I read something about that when I was considering solar panels.

Isn't setting up a 501(c) really expensive and complicated though? I heard you need lawyers and stuff.

It's not as bad as people think. For a small organization, filing for 501(c)(3) status using Form 1023-EZ is relatively straightforward if your annual gross receipts are under $50,000. The filing fee is around $275. You don't necessarily need lawyers, though having someone with experience look over your application can help. There are also online services that guide you through the process for a few hundred dollars. The main requirements are having proper bylaws, a board structure, and clear charitable purpose. Once established, annual maintenance is just filing a simple Form 990-N if you stay under the $50,000 threshold.

This is actually what we do for our school's charity auction. People make checks directly to the charity, and we just collect them. Simplifies everything tax-wise.