Community Associations required to file 1099s?
Lanier Coulter, Esq.
December 24, 2012
simple answer to this question is yes.
However, let me preface everything I'm about to write
with the following: a) I am not a CPA and b) I recommend
consulting your CPA and/or tax advisor concerning any
tax-related positions or filings your community association is
contemplating BEFORE a decision is actually made.
general, community associations are required by the IRS to issue
1099s to any independent contractor to which they paid more than
$600 in a calendar/fiscal year (have the treasurer check your
association's books for this information) for the performance of
services on behalf of the association.
Services include, but are not limited the following:
landscaping, pool maintenance and management, plumbing, roofing,
painting, etc. There
are some specific situations, like rental payments, where the
filing of a 1099 is still required even though the $600
threshold may not have been met.
1099 is like a W-2 for an independent contractor.
So, how do you get the information you need from the
independent contractor in order to accurately complete the 1099?
You ask them to provide you with a W-9.
Form W-9 contains pretty much all the information you
will need to complete each respective 1099 like the independent
contractor's tax ID number, business address, type of business,
etc. You do not file
W-9s with the IRS, rather, you keep them on file for 1099
association's treasurer or management company should make it a
practice to annually obtain a W-9 from any independent
contractor you hire BEFORE you pay them anything.
However, if you haven't done so already, now is the time
to start requesting W-9s of your independent contractors as
generally, 1099s must be provided to any independent contractor
performing services on behalf of your association by January 31st
to allow the recipient of the 1099 sufficient time to
dispute the amount(s) reported and/or correct any errors
contained on the form. Again,
generally, 1099s must be filed with the IRS (and any applicable
state or local taxing authorities) by the last day in February.
Electronic filers have until March 31st
of each calendar year to file, however.
Oh, and in case you were wondering, in general, there is
a $100 penalty associated with each 1099 that is not filed,
filed late or filed inaccurately.