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69fab · Mar 1, 2016, 05:51 AM

A friend's Mom passed away and she needed 3 rooms painted in a pinch and asked me to take a look at it and give her a price. Her Mom had lived next door to her. I told her I'm not in the painting business, but would do the work for $750.00 cash. She agreed. Then when I went to do the work she had left me a check, and went away for the weekend. She was very happy with the job, and her tenants moved in shortly thereafter. This was in September 2015. Yesterday she hands me a 1099 form and said IRS law requires for anything over $600.00 What the heck is this?

ScottGem · Mar 1, 2016, 06:01 AM

She claimed the $750 as a business expense for her tax return. By law (as you were advised) and time a business pays a contractor more than $600, they are required to issue a 1099. You have to claim that 1099 on your tax return. You CAN file a Schedule C claim the income there and deduct your expenses (the paint, etc.)

Fr_Chuck · Mar 1, 2016, 07:54 AM

It is called the law, and you did have a business, you were self employed as a painter for that job. But yes, she is correct, because you worked for her, she was required to give you a 1099.

You will claim that on your taxes as income.

joypulv · Mar 1, 2016, 12:28 PM

Yes, she is supposed to give you a 1099, but she doesn't HAVE to.

She's not being fair in the real world. You said cash to a friend's mom and that means under the table. Tell her you would have charged $1,000 if you had known. She can still toss out her copy.
How'd she get your SSN?

That's my feeling.

(I'm going to get chewed out but don't care. I sell on ebay and don't report it. Occasionally an actual profit, not just stuff around the house that would be a loss. So turn me in!)

ScottGem · Mar 1, 2016, 01:15 PM

Let me clarify what Joy said. If she claimed the expense on her tax return, they she would have had to submit a 1099 otherwise the IRS could audit her and disallow the expense. She may have already sent the 1099s to the IRS in which case it would be too late to toss her copy.

But the question of how she got your SSN is a very good one. If you were asked for and gave your SSN then you should have relaized it would be reported income. But if she doesn't have the SSN then there is no way for the IRS to match it to you.

smoothy · Mar 1, 2016, 01:18 PM

I agree.. Your friend screwed you big time. What is it they say, no good deed goes unpunished. But also yes they should have and did send you one based on the letter of the law. I think they knew if you knew you would have to report it it would have cost significantly more.

Personally I'd hound the "friend" for extra money now because you quoted them for "X" and they pull an end run and paid you for "Z" that significantly shorts you. And could even make you lose money on the deal.

I'd also never do ANYTHING for that "friend" ever again. And I have walked away from "Friends" like that for significantly less reason when no money and only minimal labor was involved.

How they got the SSN is a really good question too. Its not something that's common knowledge.