W9/1099 - What's the risk? · 🏠 Lower Taxes w/ Ryan

W9/1099 - What's the risk?

I run a real estate company and we pay a lot of contractors for all types of things, work related to flips, inspections, running errands for us, surveys, etc.

It's my understanding that any person/LLC we pay (Cash, Zelle/Quickpay, Check) over $600 that IS NOT an S/C Corp, should get a 1099.

We've never done this. We still write those costs off as expenses (because they are), but we've never collected W9s from people we work with, or created a 1099.

What's the risk here? It's my understanding that the risk here is that we can get penalized for this, but from a tax perspective, we can still write off those expenses and it doesn't affect anything there, is that right?

From my understanding we'd have to issue 1099s to the following folks:

General contractor

Sub contractors

Survey company

Inspector

Cleaner

Anyone that gets over $600. Before we pay them, we should be asking for them to fill out a W9, right?

Am I missing anything? I watched the video about this.

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