Do individuals need to send out 1099s for contractors or is that just for businesses?

Yes, you do need to issue a 1099-NEC to your handyman if you paid him $600 or more for services in the course of the year. The requirement applies to individuals, not just businesses, when the payment is for services related to your trade or business OR rental property. However, personal payments (like hiring a babysitter or housekeeper for your personal residence) generally don't require 1099s. Since your bathroom renovation is for your personal residence and not a rental property or business location, you actually don't need to file a 1099-NEC in this case. This is a common point of confusion. If you were renting out the property, then you would need to issue the 1099. Same thing if you were running a business out of your home and renovating a home office space that you deduct on your taxes.

I was in the exact same situation last year and spent hours stressing about this! I finally found this awesome tool called taxr.ai (https://taxr.ai) that helped me figure out all my 1099 questions. I uploaded my payment records and it immediately told me whether I needed to file anything. For my situation with a contractor who did work on my personal home, it confirmed I didn't need to file a 1099. But the really helpful part was when it explained exactly why - with specific IRS references. They have this feature that analyzes your specific situation rather than just giving generic advice.

Ok I tried taxr.ai after posting my skeptical comment and I have to admit I was totally wrong. It actually explained the 1099 rules better than my accountant did! I've been filing unnecessary forms for years because I thought I needed to send 1099s to everyone who did work on my rental property over $600. The tool showed me that I only need to send them to unincorporated businesses and individuals, not to LLCs taxed as corporations or actual corporations. It saved me a bunch of paperwork and the potential penalties for filing incorrect forms. It also explained exactly what information I need to collect from contractors going forward (W-9 forms) and when the deadlines are. Just wanted to follow up since I was so skeptical at first!

If you're still confused about the rules or need to contact the IRS directly to ask about your specific situation, I highly recommend using Claimyr (https://claimyr.com). I spent HOURS on hold with the IRS last year trying to get clarity on 1099 requirements, and it was a nightmare. With Claimyr, I was connected to an actual IRS agent in about 15 minutes instead of waiting for hours. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that personal payments don't require 1099s, and I got official confirmation rather than just internet advice. Super helpful when dealing with something that could potentially trigger an audit if done incorrectly.

I have to follow up about Claimyr because I'm honestly shocked. After posting my skeptical comment, I decided to try it since I've been trying to reach the IRS for WEEKS about a tax notice I received. It actually worked exactly as described. I got a text about 20 minutes after signing up saying they were connecting me, and then I was suddenly talking to a real IRS agent. The agent confirmed everything about my 1099 question AND helped resolve the notice issue I'd been stressing about for a month. Seriously one of the most useful services I've ever used - saved me so much frustration and probably a day's worth of time on hold. Just wanted to update since I was so skeptical before.

Something else to consider - if you do need to file 1099s (like for a rental property or business), make sure you get a W-9 form from your contractor BEFORE you pay them. This form gives you their tax ID or social security number which you need for the 1099. I learned this the hard way when I couldn't track down one of my contractors after the fact and ended up having to do backup withholding. Such a headache!

Just to add one more thing - make sure your contractor isn't actually operating as an LLC or Corporation. Even if you did need to file a 1099 (which you don't for personal residence work), you generally don't need to send 1099s to contractors who are incorporated. This is another reason getting that W-9 is important because it tells you their business structure.

This is such a helpful thread! I'm dealing with a similar situation but with multiple contractors. I had my kitchen renovated last year and used three different people - a plumber ($2,400), an electrician ($1,800), and a tile guy ($950). All for my personal home that I live in. Based on what everyone is saying here, I don't need to send any 1099s since this was all personal residence work, correct? I was getting stressed because I didn't collect W-9s from any of them since I didn't realize I might need to at the time. It's such a relief to know that personal home improvements don't require 1099 filing! One follow-up question though - if I decide to sell my house in a few years, do these renovation costs help with capital gains taxes even though I didn't file 1099s? I've heard home improvements can be added to your cost basis but wasn't sure if the lack of 1099s would be an issue.

This whole thread has been incredibly helpful! I'm a newcomer to dealing with contractor payments and was totally confused about when 1099s are required. Just to make sure I understand the key takeaway: if you pay contractors for work on your personal residence (like bathroom renovations, kitchen work, landscaping, etc.), you DON'T need to file 1099s regardless of the amount paid. The 1099 requirement only kicks in when the payments are made "in the course of your trade or business" or for rental properties. This is such a relief because I was panicking about not collecting tax information from my contractors. It sounds like a lot of people (including some tax preparers!) get confused about this rule and think ALL contractor payments over $600 require 1099s. Thanks everyone for sharing your experiences and clarifying this - definitely saving this thread for future reference!

As someone who's dealt with this exact situation, I can confirm what others have said - you don't need to file a 1099 for personal home improvements! I went through the same panic last year when I paid a contractor $8,500 to redo my deck and realized I hadn't collected any tax info from him. After researching extensively (and even calling the IRS), I learned that the 1099 requirement specifically applies to payments made "in the course of your trade or business." Since your bathroom renovation was for your personal residence, you're completely in the clear. What really helped me understand this was realizing that if personal payments required 1099s, we'd all be filing them for our housekeepers, babysitters, lawn services, and every handyman we hire. The IRS would be drowning in paperwork! The rule exists to track business expenses, not personal ones. Keep your receipts for your own records (they can help with cost basis if you sell), but you can rest easy knowing there's no 1099 paperwork needed for this situation.

This thread has been absolutely fantastic! As someone completely new to home improvement projects, I was terrified I'd mess up something tax-related when I hired contractors for some work around my house. I actually had a very similar situation - hired someone to install new flooring throughout my home for about $6,200. Like the original poster, I was worried sick that I needed to send a 1099 but didn't have any tax information from the contractor. Reading through everyone's experiences here has been such a huge relief! It's amazing how many people (including tax professionals!) seem to get confused about this personal vs. business distinction. The way everyone explained it makes perfect sense though - the IRS isn't trying to track every personal service we pay for, just business-related expenses. I'm definitely saving this thread for future reference. Between the explanations about W-9 forms, the business structure exemptions, and the tools people mentioned for getting tax help, there's so much valuable information here. Thanks to everyone who shared their experiences - it's incredibly helpful for those of us navigating this for the first time!

What a relief to find this thread! I'm in almost exactly the same situation as the original poster. I hired a contractor to renovate my master bathroom last month and paid him $8,400 total. Like many others here, I was completely panicking thinking I'd messed up by not getting his SSN or tax ID upfront. Reading through all these responses has been incredibly educational. The distinction between personal residence work vs. business/rental property expenses makes so much sense once it's explained clearly. I had no idea that so many tax preparers get this wrong too - that actually makes me feel better about being confused! I'm bookmarking this thread for sure. The information about W-9 forms, business structures, and those helpful tools people mentioned will definitely come in handy if I ever do rental property work in the future. For now though, it's such a weight off my shoulders knowing I don't need to chase down my contractor for paperwork or file any 1099s for this personal home improvement. Thanks to everyone who shared their experiences and expertise here. This community is incredibly helpful for those of us navigating these tax questions for the first time!

As a newcomer to this community, I have to say this thread has been incredibly enlightening! I'm currently planning a major home renovation project and was already starting to stress about potential tax implications after getting some conflicting advice from friends. Reading through everyone's experiences here has really clarified the key distinction - the "trade or business" requirement is what determines whether 1099s are needed, not just the dollar amount. It's such a relief to understand that personal home improvements, no matter how expensive, don't trigger these filing requirements. What I find most valuable is how many people shared their real-world experiences of initially being confused about this same issue. It makes me feel much more confident knowing that even experienced homeowners and some tax professionals get tripped up by these rules initially. The community support and practical advice shared here is exactly what newcomers like me need when navigating these confusing tax situations for the first time. I'm definitely bookmarking this thread as a reference for my upcoming project. Thanks to everyone who took the time to share their knowledge and experiences!

As someone completely new to dealing with contractors and tax requirements, this entire thread has been incredibly reassuring! I was in a very similar situation last year when I hired someone to replace my roof after storm damage. I paid about $9,200 and had no idea about any potential 1099 requirements until my neighbor mentioned it months later. The panic was real! I started researching frantically and found so much conflicting information online. Some sources said ANY payment over $600 requires a 1099, others mentioned business requirements, but nothing was clear about personal vs. business distinctions. What really helped me understand (and what this thread confirms) is that the key phrase in the IRS guidelines is "in the course of your trade or business." Since my roof repair was for my personal residence where I live - not a rental property or business location - no 1099 was required. The amount doesn't matter if it's truly personal. It's honestly such a relief to see how many others have had this same confusion and worked through it. This community is incredibly helpful for newcomers like me who are just trying to understand these tax requirements without making costly mistakes. Thanks everyone for sharing your experiences!

As a newcomer to this community and someone who just went through a similar contractor situation, this thread has been absolutely invaluable! I recently had my kitchen completely remodeled and paid various contractors a total of about $15,000. Like so many others here, I was completely stressed about whether I needed to file 1099s since I hadn't collected any tax information upfront. What really struck me reading through everyone's experiences is how widespread this confusion is - even among tax professionals! The key insight that finally clicked for me is that the IRS isn't trying to track every personal expense we have, just legitimate business costs. When you think about it that way, the "trade or business" requirement makes perfect sense. I'm so grateful to have found this community where people openly share their experiences and help newcomers navigate these confusing tax situations. The practical advice about W-9 forms, business structures, and the helpful tools people have mentioned will definitely be useful for future reference. It's reassuring to know there's support here when these intimidating tax questions come up! For anyone else in a similar situation - take a deep breath! Personal home improvements don't require 1099 filings regardless of the amount spent. Keep your receipts for your own records, but you can rest easy knowing you haven't missed any filing requirements.

As a newcomer to this community, I want to thank everyone who has contributed to this incredibly helpful discussion! I'm currently facing almost the exact same situation - I hired a contractor to renovate my guest bathroom and paid him $6,800 total. Like the original poster, I was completely panicking about whether I needed to send a 1099 since I didn't collect any tax information from him beforehand. Reading through all these experiences has been such a relief! The key distinction everyone keeps emphasizing about "trade or business" vs. personal residence work finally makes it crystal clear. Since my bathroom renovation was for my personal home that I live in (not a rental property or business), I don't need to file any 1099 forms regardless of the amount paid. What really resonates with me is how many people - including some tax professionals - initially get confused about these rules. It makes me feel so much better knowing that this confusion is incredibly common and that I wasn't missing something obvious. I'm definitely bookmarking this thread for future reference. The practical advice about W-9 forms, business structures, and the helpful tools people mentioned will be invaluable if I ever need to deal with rental property contractors down the road. For now though, I can breathe easy knowing my personal home improvement project doesn't trigger any IRS filing requirements! Thanks to everyone for creating such a supportive and informative community for newcomers like me navigating these confusing tax situations.

As someone completely new to hiring contractors and dealing with potential tax obligations, this thread has been an absolute godsend! I'm in a nearly identical situation to the original poster - I just finished having my master bathroom renovated and paid the contractor $7,200 total. Like so many others here, I was losing sleep thinking I'd made a huge mistake by not collecting tax information upfront. What really clicked for me reading through everyone's experiences is that the IRS rule isn't about the dollar amount - it's specifically about payments made "in the course of your trade or business." Since my bathroom renovation was purely for my personal residence where my family lives, it doesn't matter that I paid over $600. No 1099 required! I'm honestly amazed at how many people (including tax professionals!) initially get confused by this distinction. It makes me feel so much better knowing this isn't some obscure knowledge I should have just known. The way everyone has explained it here - focusing on business vs. personal expenses - makes the logic behind the rule so much clearer. Thank you to everyone who has shared their real experiences and practical advice in this thread. As a newcomer to this community, it's incredibly reassuring to find such helpful, knowledgeable people willing to guide others through these confusing tax situations. I'm definitely saving this as a reference for any future contractor questions that come up!

As a newcomer to this community, I want to add my voice to say how incredibly helpful this entire discussion has been! I'm dealing with almost the exact same situation - I recently paid a contractor $8,100 for a complete kitchen renovation in my personal home. Like so many others here, I was absolutely panicking thinking I had missed some crucial tax filing requirement. What really stands out to me from reading everyone's experiences is how the "trade or business" language is the key to understanding when 1099s are actually required. Since my kitchen work was done on my personal residence where I live (not a rental property or business location), the amount doesn't matter - no 1099 filing is needed regardless of paying over $600. I'm honestly shocked at how many people, including some tax professionals, initially get this wrong! It makes me feel so much better about being confused. The distinction between personal expenses vs. business expenses makes perfect sense once it's explained clearly, but it's definitely not intuitive at first. Thank you to everyone who has shared their real-world experiences and practical advice here. As someone new to dealing with contractor payments, having access to this supportive community where people openly discuss their confusion and solutions is invaluable. I'm bookmarking this thread for future reference - the information about W-9 forms and business structures will be helpful if I ever deal with rental properties down the road. For now though, I can finally relax knowing that my personal home improvement project doesn't create any IRS paperwork obligations!

As a newcomer to this community and someone who just went through a very similar situation, I want to thank everyone for this incredibly informative thread! I recently hired a contractor to install new hardwood floors throughout my home and paid him $6,200 total. Like the original poster, I was completely stressed about whether I needed to file a 1099 since I hadn't collected any tax information from him. Reading through all these real experiences has been such a relief! The key takeaway that finally put my mind at ease is understanding that the "trade or business" requirement is what determines 1099 filing obligations, not just the dollar amount. Since my flooring project was for my personal residence where I live (not a rental or business property), no 1099 is required regardless of the amount paid. What really struck me is how many experienced homeowners and even some tax professionals initially get confused by these rules. It makes me feel so much better knowing this confusion is incredibly common and not something I should have just known instinctively. This community has been invaluable for newcomers like me navigating confusing tax situations. The practical advice shared here about W-9 forms, business structures, and helpful tools will definitely be useful for future reference. For anyone else in a similar situation with personal home improvements - you can breathe easy knowing no 1099 filing is required for work done on your personal residence!