u just paid your plumber $1,200 to fix a burst pipe—and now you’re wondering: “Do I need to send my plumber a 1099?” You’re not alone. Many homeowners and small business owners grapple with this question every tax season. The answer depends on who you are, how you paid, and how much you paid—not just the fact that it was a plumber. Let’s clear up the confusion once and for all, with IRS-compliant guidance you can trust.
What Is a Form 1099-NEC?
Before diving into whether you owe your plumber a 1099, it’s essential to understand what the form actually is.
Form 1099-NEC (Nonemployee Compensation) is used by businesses to report payments of $600 or more in a calendar year to independent contractors, freelancers, or self-employed service providers—including plumbers who operate as sole proprietors or LLCs.
💡 Key Fact: The IRS reintroduced Form 1099-NEC in 2020 to replace the old “Box 7” on Form 1099-MISC for nonemployee compensation. It must be filed by January 31 each year for the prior tax year.
This form helps the IRS track income that isn’t subject to payroll tax withholding—ensuring contractors pay their fair share of self-employment tax.
Do I Need to Send My Plumber a 1099? It Depends on Your Status
Here’s the critical detail most people miss: Not everyone is required to issue a 1099—even if they paid over $600.
✅ You MUST issue a 1099-NEC if:
- You’re a business (including sole proprietorships, LLCs, S-corps, C-corps, nonprofits, etc.)
- You paid the plumber $600 or more in a calendar year
- The plumber is not incorporated as a corporation (more on this below)
- The payment was for services, not materials or reimbursements
❌ You DO NOT need to issue a 1099 if:
- You’re a private individual paying for personal home services (e.g., fixing your kitchen sink)
- The plumber is structured as a C-corporation or S-corporation
- You paid less than $600 in total during the year
📌 Example: Sarah owns a small coffee shop. She hired a plumber to install new sinks in her restroom and paid $1,500. Because Sarah operates a business, she must send the plumber a 1099-NEC—unless the plumber’s business is incorporated.
In contrast, if Mark paid the same plumber $1,500 to fix a leak in his personal home, he does not need to file a 1099.
How to Check If Your Plumber Is Incorporated
The IRS exempts corporations from 1099 reporting (with rare exceptions like legal services). So, if your plumber operates as a C-corp or S-corp, you’re off the hook—even if you paid $10,000.
How to verify?
Ask your plumber to fill out a Form W-9 before you pay them. This standard IRS form includes:
- Their legal business name
- Taxpayer Identification Number (TIN)
- Business entity type (sole proprietor, LLC, S-corp, etc.)
If the “Exempt payee code” box is checked or the entity type says “Corporation,” you likely don’t need to file a 1099.
🔍 Pro Tip: Keep all W-9s on file for at least four years in case of an IRS audit.
Step-by-Step: How to Issue a 1099 to Your Plumber (If Required)
If you’ve confirmed you do need to send a 1099-NEC, follow these steps:
- Collect a W-9 from your plumber (if you haven’t already).
- Total all payments made to them in the calendar year (Jan 1 – Dec 31). Only include payments for services, not parts or materials.
- Verify the $600 threshold—if total service payments ≥ $600, proceed.
- File Form 1099-NEC by January 31:
- Send Copy B to the plumber by Jan 31
- File Copy A with the IRS (electronically if filing 10+ forms)
- Submit Form 1096 (transmittal form) if mailing paper copies to the IRS.
⚠️ Penalties Apply: Late or missing 1099s can cost $60–$310 per form, depending on how late you file (IRS.gov ).
For ease, use IRS-approved e-filing services like Tax1099, QuickBooks, or Gusto—many integrate directly with accounting software.
Common Misconceptions About 1099s and Contractors
Let’s bust a few myths:
| “All contractors get a 1099.” | Only if paid ≥$600by a businessfor services. |
| “I paid in cash, so no 1099 needed.” | Payment method doesn’t matter—cash, check, or Venmo all count. |
| “My plumber didn’t ask for a 1099, so I’m safe.” | The responsibility isyours, not theirs. |
| “LLCs always get a 1099.” | Not true! Single-member LLCs taxed as sole propsdo, but LLCs taxed as S-corpsdon’t. |
For more on business structures and tax classification, see the IRS guide on business entities .
Real-World Example: Homeowner vs. Business Owner
Case 1 – Homeowner (No 1099 Required)
- Name: David
- Situation: Paid plumber $2,000 to replace water heater in his house
- Result: No 1099 needed—personal expense, not business-related
Case 2 – Rental Property Owner (1099 Required)
- Name: Lisa
- Situation: Owns 3 rental units; paid plumber $1,800 for repairs across properties
- Result: 1099-NEC required—rental income is considered a trade or business by the IRS
📊 Stat: According to the IRS, over 160 million 1099-NEC forms were filed in 2024—many from small landlords and gig economy businesses.
FAQ Section
Q1: What if I paid my plumber $500 in December and $200 in January?
A: Payments are counted per calendar year. If you paid $500 in 2024 and $200 in 2025, neither year reaches the $600 threshold—so no 1099 is required for either year.
Q2: Does it matter if I paid via credit card or PayPal?
A: Yes! If you paid $600+ via third-party processors (like PayPal, Venmo Business, or credit cards), the payment processor (not you) reports it on Form 1099-K. In that case, you do not need to file a 1099-NEC. However, note that the 1099-K threshold dropped to $600 with no transaction minimum starting in 2023 (though enforcement has been delayed—check current IRS guidance).
Q3: My plumber is a friend who does side jobs. Do I still need a 1099?
A: If you’re a business and paid them ≥$600 for plumbing services, yes—even if they’re unlicensed or “just helping out.” The IRS cares about the nature of the payment, not the relationship.
Q4: What if I forget to send a 1099?
A: File it as soon as possible. The IRS may waive penalties if you can show “reasonable cause.” Use Form 1099-NEC with “Corrected” box checked if filing late.
Q5: Can I deduct plumbing expenses without a 1099?
A: Yes. You can deduct legitimate business expenses even if you didn’t issue a 1099—but failing to file when required increases audit risk.
Q6: Where can I get official IRS instructions?
A: Always refer to the latest IRS Instructions for Form 1099-NEC or consult a CPA for complex situations.
Conclusion
So—do you need to send your plumber a 1099? If you’re a business (including rental property owners) and paid $600 or more for services to a non-corporate plumber, then yes. But if you’re a homeowner fixing your own house? You’re in the clear.
Getting this right protects you from IRS penalties and keeps your books clean. When in doubt, collect a W-9 upfront—it’s the single best habit for any business hiring contractors.
Found this guide helpful? Share it with a fellow small business owner or landlord on Facebook, LinkedIn, or X! And if you’re still unsure, consult a tax professional—your peace of mind is worth it.
Disclaimer: This article is for informational purposes only and does not constitute tax advice. Consult a qualified CPA or tax advisor for your specific situation.
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