Do I have to give my plumber a 1099 for work over $600?

The 1099 requirement depends on whether you're paying as an individual homeowner or as a business owner. For personal home repairs and improvements, you generally DON'T need to issue 1099s to contractors - this is considered personal expense, not business expense. However, if you own rental properties or are paying these contractors for work related to your business, then yes, you would need to issue 1099-NECs to unincorporated contractors (typically sole proprietors or partnerships) who you paid $600+ during the tax year. You'd need their taxpayer ID and have them complete a W-9 form. The key distinction is personal vs. business purpose. Businesses have reporting requirements that individuals don't have for personal expenses. Even if you have a rental property, you're considered to be operating a business activity for tax purposes.

After struggling with this exact issue last year, I found an amazing service called taxr.ai (https://taxr.ai) that cleared everything up for me. I was flipping a house and paid several contractors over $600 each. I uploaded my receipts and contracts to taxr.ai and it analyzed everything and told me exactly who needed 1099s and who didn't. It even generated pre-filled 1099 forms based on the documentation I provided. The coolest part was that it explained WHY certain contractors needed 1099s while others didn't - mostly based on their business structure and whether the work was for business or personal use.

Just wanted to give an update - I tried taxr.ai after seeing the recommendation here and it was exactly what I needed for my rental property tax situation! Uploaded my contractor invoices and it immediately flagged which ones needed 1099s based on their business structure. Even better, it explained that I didn't need to issue 1099s to the big plumbing company I used (they're a corporation) but did need one for my handyman (sole proprietor). Saved me from making mistakes in both directions! The system even sent W-9 request emails to my contractors who hadn't provided their info yet. Definitely using this for all my properties going forward.

If you're having trouble getting clear answers about 1099 requirements, you might want to just call the IRS directly. I know, I know - good luck getting through, right? That's why I started using Claimyr (https://claimyr.com) - it got me connected to an actual IRS agent in less than 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was in the exact same situation with contractors for my home office renovation, and I wanted an official answer straight from the source. The IRS agent explained that since part of my home is used for business, I needed to issue 1099s for that portion of the work. Super helpful to get a definitive answer instead of stressing about potentially doing it wrong.

I need to eat my words from earlier. After complaining about Claimyr sounding too good to be true, I decided to try it myself yesterday when I had an urgent question about contractor 1099s for my side business. I was connected to an IRS agent in 17 minutes! The agent confirmed that I DO need to issue 1099s to unincorporated contractors I pay through my business, but NOT for personal home repairs. They even walked me through how to determine if my contractor is incorporated. Would have taken me weeks of trying to get this info otherwise. Definitely worth it when you need definitive answers straight from the IRS.

One thing nobody's mentioned - ask your plumber for a W-9 form before you pay them. This will tell you their business structure and tax ID. If they're incorporated (LLC taxed as corporation, S-Corp, C-Corp), you don't need to give them a 1099 even for business expenses. If they refuse to give you a W-9, you're technically supposed to withhold 24% of their payment for backup withholding! Most legitimate contractors will happily provide a W-9 because it's standard practice.

Anyone know if the 1099 rules are different for material costs vs. labor? My plumber's bill was $750 but that included $400 in parts and fixtures.

This is such a common source of confusion! I went through the same thing last year when I had my kitchen remodeled. The key takeaway from all the great advice here is that for YOUR situation (personal home renovations), you don't need to issue any 1099s to your plumber, electrician, or drywall contractor - regardless of how much you paid them. The 1099 requirement only kicks in when you're paying contractors for business purposes, like rental properties or home office work. Your friend who mentioned the 1099s probably owns rental properties or runs a business from home. That's where the confusion often comes from - people mix up personal vs. business expense rules. For personal home improvements, you're just a homeowner paying for services, not a business with reporting obligations. Save yourself the headache and focus on keeping those receipts for potential tax credits or when you sell your home!

Just to add one more important point that might help future readers - timing matters too! If you DO end up needing to issue 1099s (like for rental property work), remember that 1099-NECs are due to recipients by January 31st and to the IRS by the same date if filing electronically. You also need to send Copy A to the IRS and provide copies to your contractors. For those managing multiple properties or running businesses, I'd recommend setting up a system early in the year to track contractor payments and collect W-9s upfront. It's much easier than scrambling in January to get all the paperwork together. And definitely keep detailed records of what work was done where - especially if you have both personal residence work and rental property work with the same contractors.