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Hiring handy man for work in community - Georgia

Started by AngelaG6 • 8 replies • 1868 views

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AngelaG6 (Georgia)
Posts: 8
Posted:
Hello All:

I have a handy man who is very reasonable and does excellent work. I would like to have him do some jobs in the community. My management company requires that when I submit invoices it should either have the workers social security number or their tax i.d. number. The handy man has told me that if a job is under $600 dollars he does not have to submit what he calls an "1199". I suppose he has a valid reason for not wanting to submit his tax I.D. because he is a citizen. Does anyone know if there is any validity to what he says about not having to submit the 1199 if a job is under $600? I really want to use his services and don't want to miss out on being able to save the association money and also getting a guy whose work ethic is great.
RogerB (Colorado)
Posts: 5,067
Posted:
Angela, I believe your handyman is correct.
BruceF1 (Connecticut)
Posts: 2,535
Posted:
Quote:
Posted By AngelaG6 on 10/25/2011 9:36 AM
Hello All:

I have a handy man who is very reasonable and does excellent work. I would like to have him do some jobs in the community. My management company requires that when I submit invoices it should either have the workers social security number or their tax i.d. number. The handy man has told me that if a job is under $600 dollars he does not have to submit what he calls an "1199". I suppose he has a valid reason for not wanting to submit his tax I.D. because he is a citizen. Does anyone know if there is any validity to what he says about not having to submit the 1199 if a job is under $600? I really want to use his services and don't want to miss out on being able to save the association money and also getting a guy whose work ethic is great.

Sorry to sound suspicious, but he may not want to submit his SS number or tax ID because he may not want to claim the income on his taxes.

You might also want to make sure he is self-insured or if your HOA policy will cover him if he is injured while doing work for your HOA.
JohnM48 (Pennsylvania)
Posts: 89
Posted:
Angela,

Quote:
Posted By AngelaG6 on 10/25/2011 9:36 AM
Does anyone know if there is any validity to what he says about not having to submit the 1199 if a job is under $600? I really want to use his services and don't want to miss out on being able to save the association money and also getting a guy whose work ethic is great.

While there is *some* validity to what the handyman is saying, his interpretation of the law is not correct.

1. The form he is referring to is a "1099" not "1199".

2. He does not issue a 1099, the association does. The form takes the place of a W-2 when the worker is an independent contractor. Your association would be issuing Form 1099-MISC and reporting the handyman's income as "Non-Employee Compensation".

3. While it is true that a Form 1099 is only issued if the compensation is $600 or greater in a calendar year, that does NOT relieve your handyman of the requirement to provide his social security number, nor does it relieve your association from the obligation to obtain and maintain a record of his social security number. Your association is legally obligated to obtain his social security number on a Form W-9 that is submitted to you by the handyman BEFORE you make ANY payments to him.
Association President
BradP (Kansas)
Posts: 2,640
Posted:
Angela:

in case you can't see me I am over here in Kansas waiving a big RED flag...couple of points:

1. as others have said it sounds as if he doesn't want to claim this on his taxes, which is his business...your association is not required to issue a 1099 unless he makes $600 or more.
2. I would not deviate from your standard operating procedure of requiring a SSN or tax ID number for payment. If he doesn't want to comply there is a reason for that.
3. I would make sure he has appropriate licenses and insurance as well.

Handy men can be great for certain tasks, but i would be careful.
MelissaP1 (Alabama)
Posts: 13,836
Posted:
The information about the 1099 is correct. I just wanted to add a few concerns. Is your handy man licensed and insured? A HOA or anyone should hire only those contractors who are licensed and insured. Your HOA should also solicit bids from multiple sources (3 recommended) before deciding to hire this one contractor. You can recommend your Handyman submit a bid to the HOA to do some work and then they will vote to decide to hire him.

Your HOA could work out a deal with your handyman if he fits all the criteria to be their sole contractor on these small items. It would be up to the HOA and the contractor to discuss if they would like to have a handyman service on-call for them. This option may help him reach his supposed $600 a year paid work goal.

We used a handyman service such as "Mr. Handyman". They have a uniform, a solid base rate, and their own separate company. They weren't a fly by night company. Plus they could send out the best handyman skilled to do the job we needed done.

I've actually worked for a handyman service and as a 1099 contractor in the past. You may think they are the best thing since slice bread but once you start shopping around with the options out there, you may be singing a different tune. Not all handymen and women are equal...
Former HOA President
AngelaG6 (Georgia)
Posts: 8
Posted:
Thank you everyone. All of your information has been very helpful!
SheliaH (Indiana)
Posts: 6,964
Posted:
You want to ask a tax expert about this, but I would think it doesn't matter if it's $600 or $60 - if it's income, it has to be reported to the IRS. I would think the checks would be cut by the management company (upon approval by the Board), and at the end of the year, the Association has to account for all expenses and income. If payments to this guy by the Association don't marry up with his income tax return, there could be trouble.

We have a handyman and our management company takes care of this paperwork for us and it's worked out quite well.
If it is not right do not do it; if it is not true do not say it. Marcus Aurelius
BradP (Kansas)
Posts: 2,640
Posted:
Quote:
Posted By SheliaH on 10/26/2011 7:02 AM
You want to ask a tax expert about this, but I would think it doesn't matter if it's $600 or $60 - if it's income, it has to be reported to the IRS. I would think the checks would be cut by the management company (upon approval by the Board), and at the end of the year, the Association has to account for all expenses and income. If payments to this guy by the Association don't marry up with his income tax return, there could be trouble.

We have a handyman and our management company takes care of this paperwork for us and it's worked out quite well.

Sheila:

for a business hiring someone they are only required to file a 1099 if the income earned was over $600. They can still report it to the IRS if it is less but anything under $600 is the responsibility of the person earning to report

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