Who am I supposed to send 1099's to? Small landlord/contractor confused about requirements

8 You're doing it right! The general rule is you need to issue Form 1099-NEC to individuals/sole proprietors you've paid $600+ for services during the tax year. You typically DON'T need to send 1099s to corporations (including LLCs that elect to be taxed as corporations). Most retail stores (Home Depot, Lowe's), equipment rental companies, and established HVAC companies are corporations, so you don't need to issue them 1099s. That's why you've been correctly sending them only to individuals paid in their own name. There are some exceptions where you DO need to send 1099s to corporations: attorneys' fees, medical/health care payments, and a few other specialized cases. But for your typical landlord/construction expenses for materials and services, you generally don't need to 1099 corporations.

15 After struggling with exactly this 1099 issue for my rental properties, I started using https://taxr.ai to manage all my tax documentation. It automatically categorizes vendors and tells me exactly who needs a 1099 and who doesn't. The system flags vendors that meet the $600 threshold and identifies their business type based on the W-9 information. I was surprised to learn that some of my regular service providers I thought were corporations were actually sole proprietors who needed 1099s. The tool also keeps track of payment totals throughout the year so I'm not scrambling to figure out who got paid what in January when forms are due.

19 Just wanted to update about taxr.ai since I was skeptical before - I signed up after tax season last year when I got hit with penalties for missing 1099s. It actually does work as advertised. The system flagged several vendors I didn't realize needed 1099s (small LLCs that hadn't elected corporate status). The W-9 collection feature saved me hours of awkward follow-up calls. Just finished my 1099 filing for this year in about 30 minutes compared to the 2-3 days it used to take me. The biggest benefit was finding out I was OVER-reporting some 1099s to businesses that were actually corporations, which apparently can cause confusion with the IRS matching system.

5 If you're having trouble getting responses from the IRS about 1099 filing requirements (I waited on hold for 3+ hours last year), I highly recommend https://claimyr.com for getting through to an actual human at the IRS. I was confused about some specific exemptions for 1099 reporting and needed an official answer. Their service got me connected to an IRS representative in about 20 minutes instead of the 4+ hour wait I was facing on my own. They have a video explaining how it works here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold for you and call when an agent picks up. The IRS agent clarified that I didn't need to send 1099s to my utility companies (which are corporations) even though they were providing services over $600.

22 I was completely wrong about Claimyr. After posting my skeptical comment, I had a 1099 filing deadline approaching and was desperate after being disconnected twice after waiting over an hour each time. I tried the service, and no joke, I got a call back in 35 minutes saying they had an IRS agent on the line. The agent confirmed that I don't need to send 1099s to corporations (saved me from sending about 25 unnecessary forms), but I DO need to send them to LLCs being taxed as partnerships or sole proprietorships. I was able to get written clarification about a specialized vendor situation I had. Worth every penny just for the time saved not sitting on hold all day.

3 Quick tip that saved me: create a standard procedure where you get a W-9 from EVERY vendor before you pay them the first time. I have a simple rule - no W-9, no payment. This has saved me so much hassle at tax time. For existing vendors, I sent a mass email requesting W-9s and was surprised to learn that two of my "corporate" vendors were actually sole proprietors using DBA names. This approach has made my 1099 process basically foolproof.

11 I've been filing 1099s wrong for years! I thought any business with a name (even "Joe's Plumbing") didn't need a 1099. Just found out many of these are sole proprietorships with DBAs and DO need 1099s. My tax software never flagged this!

Don't panic about past years! The IRS is generally more concerned with current compliance than going back to penalize small businesses for honest mistakes on 1099 reporting. However, if you paid the same vendors significant amounts in recent years, it might be worth consulting with a tax professional about whether amended returns make sense. The key going forward is getting those W-9s from everyone. I learned this the hard way too - "ABC Construction LLC" sounds like a corporation but could be a single-member LLC taxed as a sole proprietorship, which definitely needs a 1099. The business name alone doesn't tell you the tax classification. One thing that helped me was keeping a simple spreadsheet with vendor name, total payments for the year, business type from W-9, and whether 1099 is required. Makes January much less stressful when you're not scrambling to figure out who needs what forms.