Form 1099

Did you pay this person more than $600 last year?

And it really would depend on how the contractor was set up.

But who are you to request to look at the forms, and what is it that you are looking for?

some people may be in for a lesson in IRS tax forms then... I believe that a 1099 would be used to record certain payments to contractors for goods and services, but there are several types of (possibly) common payments that are NOT recorded on a 1099... so, what you pay the contractor via a check and what you report to the IRS on a 1099 may well be different.

So, if they match, good. If they don't, that is not an automatic guarantee of wrongdoing.

Isn't the 1099 used for wages or untaxed income such as interest earned, that has not been taxed? Unless these contractors are self employed and working for the HOA, why would the HOA send out 1099s to employees of companies?

Is the contractor really a business but only has one employee? Business (HOA) to business would not (IMHO) ever require a 1099.

What are you really trying to find out?

Mary, my point is that some people say they are contractors when, in fact, they are businesses. I have had a business for 30 years and am a "contractor" to many companies. I never get 1099-MISC. I believe as soon as you get a business EIN number from the IRS (which most business would have) then you should not be getting a 1099-MISC.

Mary,
Help me here: The association hires contractors who work for a company and the HOA has to provide 1099s?. Maybe the work is being done by an employee of --say a plumbing company. No 1099s should be required. If the contractor is self employed, then I can understand it but ???? [xx(}

Everyone you write a check to for over $600 needs some form of 1099. You have to, per IRS rules.

- Does everyone do it? No. Rarely do companies or HOAs do this.

- Does the IRS check? Rarely. But they would in an audit. Because HOA's are not for profit, the IRS has better things to do, like going after people who owe them money.

Donna,

If the contractor is incorporated then the HOA does not have to provide a 1099. The exception to the contractor rule is attorneys which should be provided with a 1099 whether the law firm is inc. or not. If the contract is with a company that is not incorporated, then the 1099 goes to the company not the individual employee assigned to do the work. At least that's the way I understand it should be handled.

Barbara we have the same type of set up here. But we DO issue a 1099 on him at the end of the year. If he doesn't report his income to the I.R.S. that's HIS problem. But cover your rear ends and do issue one. Otherwise you'll look like you're paying him under the table which could cause problems for you.

If you use a W-2 then you have to deduct the taxes from his paycheck; if you use a 1099 then HE has to report his income and will be taxed that way.

You can go to www.irs.gov and click on "Forms and Publications" then click on "Forms by Mail". There you will see the 1099 form. You can get a lot of information from this I.R.S. website. It's official.

Barbara:

I highly recommend you file the 1099. You can download it from the IRS site.

If he is a contractor or vendor and not an EMPLOYEE then you file the 1099.

We ran into a serious issue with this several years ago.

We had a gentleman doing our landscaping maintenance for several years when we discovered that our treasurer was NOT filing a 1099 on him.

When we installed a new treasurer and that person contacted the man for his social to update the files and fill out the forms, he threw a fit.

He said we (the board) had made an "agreement" with him that we would NOT file 1099s for the money we paid him.

Apparently two of our board members (both neighbors of this guy) told him that. One was the board VP, the other was, you guessed it, the treasurer.

We told him that we were obligated to file the 1099s and that those two board members had no formal or official ability to make such an agreement with him.

That's when he said that his rates would have to go up to pay for whatever taxes he was going to have to be paying now AND he wanted to BILL US for the amount he will have to pay in BACK TAXES if we filed for the past 3 years that he was flying under the IRS radar.

It was a mess.

We fired him and the VP quit a few months later. The treasurer had already walked away from the board a few months prior to that, which is how we found out that the 1099s weren't being filed to begin with when the new treasurer started going through the records.

Thank all of you. One question. If we begin now to file the 1099 are we required to file past years?

Barbara,

I would just prepare 1099's for the current year. The original copy is mailed to the individual and a copy is sent on a transmittal form to the IRS. The 1099 is not the same as a W2. The 1099 is used to report income other than wages whereas the W2 is used to report wages paid.