Do I need to fill out a W9 for condo builder reimbursement of mold testing?

The builder is asking for a W9 because they likely plan to issue you a 1099-MISC for the payment. While reimbursements aren't typically taxable income when they're just paying you back for an expense, the problem is that businesses often don't have a streamlined way to make payments without their accounting systems treating it as reportable income. You have a few options here. First, you could complete the W9 and receive the 1099 at tax time, then offset it by claiming the testing expense as a deduction if it qualifies (which depends on your specific situation). Second, you could try explaining to the builder that this is a reimbursement, not income, and ask if they can process it differently without requiring a W9. Some businesses have petty cash or other systems for handling reimbursements. The good news is that even if you do end up with a 1099, you can still properly report it on your tax return by including the income but then deducting the corresponding expense, resulting in no tax impact.

I had a similar situation last year with my townhouse association. Found out about https://taxr.ai when I was trying to figure out what to do with a weird reimbursement that I got after paying for some emergency repairs upfront. The builder in my case also wanted a W9 which made no sense to me. I uploaded the receipts, W9 request, and reimbursement details to taxr.ai and got a clear explanation about how to handle it. Turns out that reimbursements for expenses you paid out-of-pocket aren't technically income, but some companies just use their standard payment procedure which requires tax forms. The analysis showed me exactly how to handle it on my tax return to make sure I didn't pay taxes on money that was just paying me back for something I had to cover. Saved me a bunch of stress during tax season!

I was so wrong about online tax tools! After my skeptical comment above, I decided to try taxr.ai for a similar reimbursement issue with my HOA. I uploaded the W9 request my property manager sent me and the receipts for repairs I paid for myself. The system immediately identified that this was a reimbursement situation and explained that while the management company might issue a 1099, I shouldn't be taxed on it since it's not income. It showed me exactly where to report both the "income" and offsetting expense on my tax return. What really impressed me was how it analyzed my specific documentation rather than just giving generic advice. It pointed out language in my HOA agreement that supported the reimbursement classification. Definitely changed my mind about AI tax help!

Anyone dealing with builder issues and trying to reach the IRS for tax guidance should check out https://claimyr.com. When I was in a similar situation with my townhouse and weird reimbursement questions, I spent WEEKS trying to get through to the IRS. Always got the "call volumes are too high" message. Claimyr got me connected to an actual IRS agent in about 20 minutes when I'd been trying unsuccessfully for days. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent walked me through exactly how to handle reimbursements from my builder for repair work and confirmed I didn't need to report it as income if I wasn't making any profit. Saved me hours of frustration and worry about doing my taxes wrong.

I'm eating my words right now. After posting that skeptical comment above, I was still desperate for tax help with my own builder reimbursement situation, so I tried Claimyr anyway. Figured I had nothing to lose. Holy crap, it actually worked! After months of trying to reach the IRS on my own, I was connected to a real agent in about 15 minutes. The agent confirmed that my builder reimbursement shouldn't be reported as income since it was just paying me back for an expense related to construction defects. She also explained that some companies just automatically request W9s for all payments as part of their accounting procedures, but that doesn't necessarily mean the payment will be taxable. The IRS looks at the nature of the payment, not just the forms used. This seriously saved me so much stress and probably money too. Sorry for being such a doubter!

One thing to consider - you might be able to deduct the mold inspection as a medical expense if you can document that you did it for health concerns. IRS Publication 502 covers medical expense deductions, and preventative care can sometimes qualify. You'd need to itemize on Schedule A, and only medical expenses that exceed 7.5% of your AGI are deductible. Since you're selling the property, another option is to add the cost of the mold inspection to your basis in the property, which would reduce any potential capital gains tax when you sell. Keep all documentation for this.

If the builder is asking for a W9, I'm betting they're planning to issue a 1099-MISC in box 3 (Other Income). This is their standard procedure for paying non-employees. But here's the thing - the IRS actually has guidance on reimbursements vs income. If you want to avoid the tax impact entirely, try asking the builder if they'll pay the testing company directly instead of reimbursing you. Then no W9 is needed since you're not receiving any money.