Question for the bogleheads that understand taxes!
I paid my contractor a total of 103500 for a major renovation for a rental property. When gathering my records to send him a 1099-Misc I realized that the first payment of $50K was actually paid to him in Dec. 2012 with subsequent payments totalling the $103500.
My question is do I subtract the $50K from the total paid in 2013?
I want him to have to pay taxes on every penny - he was really a nightmare contractor! Thanks for any help.
IRS doesn't answer questions anymore. Thanks!
Reporting 1099-Misc for IC payments
Re: Reporting 1099-Misc for IC payments
Sure sounds like you should make the 1099 for the difference (about 53K). While he has to account for that, he probably will not pay taxes on much; he probably has labor costs, materials, normal business expenses (insurance, travel, tools, etc, etc.)
Re: Reporting 1099-Misc for IC payments
Sounds like you should have given him a 1099 last year for the first payment. The current one should only be for payments made in 2013.
By the way, I used http://www.efile1099now.com/ this year and liked doing it online. Anyone else found anyone better/cheaper? I only usually have a couple to file.
By the way, I used http://www.efile1099now.com/ this year and liked doing it online. Anyone else found anyone better/cheaper? I only usually have a couple to file.
Re: Reporting 1099-Misc for IC payments
Thanks - I was afraid that was the answer. I hope not doing one last year doesn't cause any problems for me. The joys of owning rental property!!
Re: Reporting 1099-Misc for IC payments
Thanks for the link PaddyMac - will check it out. I had called and received the forms from the IRS which I will probably use, but by hand. If the website makes it easier, will definitely use.
Re: Reporting 1099-Misc for IC payments
really looks like the efile web site will be easy - will end up costing me $8.00 but sounds like its worth it. since it has to be the original form, only way I could do it would be to hand write it and I'm hesitant to do that.
Thanks for this - believe it will save some headache. Also, I don't see why it shouldn't be deductible as a rental property expense.
Thanks for this - believe it will save some headache. Also, I don't see why it shouldn't be deductible as a rental property expense.