Schedule E 1099-misc issuance questions: Do I need to report forms I sent out?

8 You've run into a common issue for new landlords! For Schedule E, questions A and B are asking whether you were required to file 1099-MISC forms and whether you actually filed them. Generally, you're required to issue Form 1099-MISC if you paid someone who isn't a corporation $600 or more during the year for services related to your rental property. Based on what you shared, you would technically be required to issue 1099-MISC forms to both your cleaning person ($850) and handyman ($1200) since both payments exceed the $600 threshold. If you haven't issued these forms yet, you should honestly answer "Yes" to question A (were you required to file) and "No" to question B (did you actually file them). This is better than answering incorrectly, which could potentially trigger issues if you're audited.

15 I was in a similar situation with my rental property last year and was totally confused about the whole 1099 thing. After going in circles with different tax programs, I finally used https://taxr.ai to upload my Schedule E and they explained exactly what I needed to do about the 1099 questions. Their AI walks through each line of the tax form and pointed out that for question A, I needed to answer "Yes" since I was required to file 1099s for my property manager and handyman (both over $600). For question B, I answered "No" since I hadn't issued them yet. The tool also showed me how to properly report all my rental income and expenses even though I hadn't issued the 1099s. Saved me a ton of stress since I was worried about getting in trouble for the missing forms.

3 Just wanted to update after trying https://taxr.ai that the other commenter recommended. I uploaded my Schedule E draft and asked specifically about the 1099 questions. It immediately highlighted both questions A and B and explained that I should answer "Yes" to A since I paid my lawn service over $600, but that I should answer "No" to B since I hadn't issued the forms yet. What I found really helpful was that it showed me exactly what penalties might apply for not issuing them (which wasn't nearly as scary as I thought) and gave me instructions for issuing them late. The system even generated a checklist of what information I'd need to collect from my service providers. Definitely worth checking out if you're dealing with the same Schedule E issues!

7 After spending THREE HOURS on hold with the IRS trying to get clarity on these Schedule E 1099 questions, I finally found https://claimyr.com which got me connected to an IRS agent in about 25 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was honestly ready to give up before trying this. The agent I spoke with explained that while technically I should have issued 1099s to my property maintenance people (I paid my landscaper $2200 last year), they primarily care that I'm reporting all expenses accurately on Schedule E. They told me to answer the questions truthfully (Yes to A, No to B) and suggested I issue the forms now even though they're late. Seriously, trying to get through to the IRS directly is a nightmare, but this service was a game-changer for getting an official answer.

6 I was the skeptic who commented above about Claimyr seeming fishy. Well, I'm back to eat crow. After my 4th attempt trying to reach the IRS myself about my Schedule E 1099 questions (and getting disconnected AGAIN after 90+ minutes on hold), I broke down and tried the Claimyr service. I got connected to an IRS representative in about 35 minutes. The agent clarified that I should absolutely answer the Schedule E questions honestly, but that there's actually a "first-time penalty abatement" available if this is my first time missing the 1099 filing requirement. They walked me through how to issue the forms now and what to include in a letter explaining that I wasn't aware of the requirement as a new landlord. Lesson learned - sometimes it's worth using a service rather than banging your head against the wall!

5 One thing nobody has mentioned is that you need the SSN or EIN of the people you paid in order to issue 1099s. Did you collect W-9 forms from your cleaning person and handyman? If not, you're supposed to withhold backup withholding of 24% if they won't provide their taxpayer ID info. That's where it gets complicated for small landlords.

11 Landlord of 5 properties here. Honest advice? While technically you're supposed to issue 1099s to service providers, many small landlords don't bother for sporadic help like occasional cleaning or small repairs. Focus on accurately reporting your income and expenses on Schedule E - that's what the IRS cares most about. If you're claiming the expenses, you should be ready to document who you paid if ever questioned, but the 1099 issue is rarely a problem for small landlords.

14 Quick tip if you're using TurboTax - if you say "Yes" to question A and "No" to question B, it will flag this as an issue but still let you file. The software will likely generate a warning about potential penalties, but go ahead and continue. In my experience filing several rental returns, I've never had an issue with the IRS following up on this specific discrepancy for small landlords. Just make sure all your income and expenses are accurately reported.