As a homeowners association (HOA), you are responsible for filing 1099 forms for any contractors or service providers that you pay more than $600 to in a calendar year. This includes payments made to independent contractors, as well as payments made to businesses for services such as landscaping, pool maintenance, or legal services.
To file a 1099 form, you will need the following information:
The name, address, and taxpayer identification number (TIN) of the contractor or service provider. You can ask the contractor or service provider for this information, or you can use IRS Form W-9 to request it.
The total amount paid to the contractor or service provider during the calendar year. This includes any payments made by check, cash, or credit card.
The type of services provided by the contractor or service provider.
Once you have this information, you can use IRS Form 1099-MISC to report the payments made to the contractor or service provider. You will need to complete one form for each contractor or service provider that you paid more than $600 to. You will need to file the 1099 forms by January 31st of the year following the payment. For example, if you made payments to a contractor in 2021, you will need to file the 1099 form by January 31, 2022. You will also need to provide a copy of the 1099 form to the contractor or service provider by this date.
In addition to filing the 1099 forms, you will also need to report the payments on your HOA's tax return. This is typically done on Form 1120-H.
It's important to accurately report payments made to contractors and service providers on your 1099 forms and tax return. Failing to do so can result in penalties and fines from the IRS.
Does the HOA have to file a 1099 if the vendor is a company?
If the contractor or service provider is incorporated, however, you are generally not required to file a 1099 form for payments made to them. This is because corporations are taxed differently than other types of businesses, and the IRS does not require 1099 forms for payments made to corporations.
At Red Rock, we take care of 1099 filings for our communities and vendors. If you have any questions about filing 1099 forms for your HOA, reach out to your community manager or consult with a tax professional for further guidance.
For more information visit the IRS at https://www.irs.gov/businesses .