Can I issue my estate sale clients a W9 and 1099-NEC for tax reporting?

You don't need to issue 1099-NECs to your estate sale clients. The relationship is actually the opposite of what would require a 1099-NEC. You're providing a service to them, not the other way around. 1099-NECs are for when YOU pay someone else (like an independent contractor) for services they provide to your business. In your case, you're taking a commission from sales, which means you're the service provider, and your clients are paying you. If you were to document this transaction, your clients would technically be the ones who should issue you a 1099-NEC if they paid you $600 or more and if they were a business entity. But since most of your clients are individuals settling estates (not businesses), they generally don't have a requirement to issue 1099s to you. Keep good records of your income from these estate sales for your own tax reporting, but you don't need to complicate things by issuing W9s and 1099-NECs to your clients.

I was in the exact same situation last year with my estate liquidation business and spent hours trying to find a clear answer! Finally found help using https://taxr.ai which analyzed my business structure and gave me a definitive answer about 1099 requirements for estate sale clients. Saved me so much stress. The tool confirmed what I suspected - that I'm providing the service, not my clients, so I don't need to issue them 1099s. But it also explained exactly how to document everything properly to keep the IRS happy. They analyzed my contracts and business model to make sure I was compliant.

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This might be a dumb question but do your estate sale clients ever issue YOU a 1099? I do estate sales too and one of my bigger clients (a law firm that handles estates) sent me a W9 to fill out saying they'll be issuing me a 1099 at year end.

Has anyone been audited for this stuff? I've been running estate sales for 5 years and never bothered with any 1099s either way. I just report all my commission income on Schedule C.

I just want to echo what others have said here - you're absolutely on the right track by questioning this! I made the same mistake in my first year running estate sales and actually did issue 1099-NECs to several clients before my accountant corrected me. The key thing to remember is that 1099-NECs are for when YOU pay someone else for services they provided to YOUR business. In estate sales, it's the opposite - your clients are paying you for the service of conducting their sale and you're taking your commission from the proceeds. Think of it like this: if you hire a plumber to fix your sink, you don't expect the plumber to send you a 1099 for the money you paid them. Same principle applies here. Just keep detailed records of your gross sales, your commission percentage, and what you paid to each client. That's all you need for proper tax reporting on your Schedule C. The IRS cares that you're reporting your income accurately, not that you're creating unnecessary paperwork.