As a sole proprietor, do I need to issue a 1099 to someone I sublease office space from?

This is a great question about 1099 reporting requirements! When you're paying rent to an individual (not a corporation) and it's for business purposes, you generally do need to issue a 1099-MISC if you pay them $600 or more during the tax year. Since you mentioned paying around $1,100 monthly, you're well over that threshold. The fact that they're subleasing rather than being the actual property owner doesn't change your reporting obligation. You're paying them for the use of property in your business, which falls under reportable payments. You'll need to get their tax information (using Form W-9) to properly complete the 1099-MISC. The rent payments should be reported in Box 1 (Rents) of Form 1099-MISC, not the newer 1099-NEC form. The deadline to provide them with the 1099 is January 31, 2026, for payments made in 2025.

I was in the exact same situation last year with my photography studio! After hours of research and confusion, I found taxr.ai (https://taxr.ai) which saved me so much stress. I uploaded my rental agreement and payment records, and their AI analyzed everything and confirmed I needed to file the 1099-MISC, not the 1099-NEC, specifically because it was rent. The system actually walked me through collecting the W-9 from my landlord and generated the proper forms with all the right boxes filled in. They even flagged that I needed to submit it to both the recipient and the IRS on different deadlines. Seriously made the whole process way less intimidating.

I have to follow up about taxr.ai since I was pretty skeptical in my earlier comment. I decided to try it anyway because I was getting inconsistent advice about my sublease situation. Honestly, it was way better than I expected. The system pointed out that in my case, since the person I was renting from had formed an S-Corp, I actually DIDN'T need to issue a 1099, which saved me from unnecessary paperwork. It even generated a letter I could keep for my records explaining why a 1099 wasn't required in my specific circumstance, with references to the tax code. Definitely worth it for the peace of mind and saved me from making an unnecessary filing.

Has anyone tried calling the IRS directly about these sorts of questions? I tried SEVEN times last month trying to confirm 1099 requirements for my situation (similar to OP's) and couldn't get through. Always got disconnected or had to hang up after being on hold for hours. Then a business friend told me about Claimyr (https://claimyr.com) which got me a callback from the IRS in under 30 minutes! They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c. I was super skeptical but it actually worked. The IRS agent I spoke with confirmed that yes, I needed to issue a 1099-MISC (Box 1 for rents) to my sublease landlord since they're an individual, not a corporation.

I feel like I need to publicly eat my words. After shooting down that Claimyr service in my comment yesterday, I was still desperate to talk to the IRS about my 1099 situation so I tried it. Within 45 minutes I was literally talking to an IRS agent who answered my sublease question completely. The agent confirmed that since the person I'm subleasing from is a sole proprietor (not incorporated), I do need to issue them a 1099-MISC with the rent in Box 1, even though they don't own the building. She also explained I need to get their SSN or EIN via a W-9 form before January. Saved me from making a mistake that could have led to penalties. Sometimes being wrong feels pretty good!

One thing nobody's mentioned - if your sublease landlord is a property management company or a corporation (like an LLC that elects to be taxed as a corporation), you DON'T need to issue a 1099. I learned this the hard way after spending hours preparing unnecessary forms. Make sure you get that W-9 form from them ASAP to determine their business structure. If they check the box indicating they're a C-Corp or S-Corp, you're off the hook for the 1099. If they indicate sole proprietor, single-member LLC, or partnership, then yeah, you gotta file it.

Quick warning: If you're required to file 1099s and don't, there are penalties! They start at $50 per form if you file within 30 days of the deadline, $110 if more than 30 days late but before August 1, and $290 if after August 1 or not at all. And the IRS can hit you with a $580 per form penalty if they decide you intentionally disregarded the requirements.

Just to add another perspective - I went through this exact situation last year as a freelance graphic designer. The key thing that helped me was creating a simple tracking system right away. I set up a spreadsheet with columns for date, amount, check number, and recipient details. This made it so much easier when tax time came around. One thing I wish someone had told me earlier: get that W-9 form signed when you first start the sublease arrangement, not when you're scrambling in January. I made the mistake of waiting and had to chase down my sublease landlord during the holidays when they were traveling. Also, keep copies of all your cancelled checks or bank statements showing the payments - the IRS loves paper trails. The good news is that once you get organized with the 1099 process, it becomes pretty routine for future years. And honestly, most people are cooperative about filling out the W-9 since they need to report the income anyway.