Do You File a 1099-NEC for a Handyman on a Torrance Rental?

Published August 10, 2026

The reporting threshold for Form 1099-NEC rises to $2,000 for payments made during 2026, up from $600. Whether a Torrance landlord has to file at all still turns on a separate, less settled question: whether renting the property counts as a trade or business.

The short answer

The reporting threshold for Form 1099-NEC rises to $2,000 for payments made during 2026, up from $600, so a Torrance landlord paying a handyman under $2,000 for the year generally has no 1099-NEC to file on that threshold alone. But the filing requirement only applies to payments made in the course of a trade or business, and whether ordinary rental ownership counts as one is a separate, fact-specific question the IRS instructions don't fully resolve.

Last verified: August 10, 2026

The threshold that changed

Form 1099-NEC reports nonemployee compensation, payments to independent contractors like a handyman who isn't your employee. For years, the trigger for filing was $600 paid to that person during the year. According to the current IRS instructions for Form 1099-NEC, that threshold increased to $2,000 for tax years beginning after 2025, meaning it applies to payments made during 2026 and reported on the return filed in 2027. The instructions also note the $2,000 figure may be adjusted for inflation starting in calendar year 2027.

That's a real change for landlords running smaller jobs. A single $900 repair call that would have required a 1099-NEC under the old $600 threshold falls under the new $2,000 line and, on the amount alone, doesn't.

One practical note: if you're pulling last year's Schedule E instruction booklet for guidance, the version covering the 2025 tax year (the one filed in early 2026) still references the old $600 threshold, because that booklet covers payments made during 2025, before the higher threshold took effect. Don't let an older instruction booklet's number override the current threshold for what you actually pay a contractor during 2026.

The threshold isn't the only gate

Meeting or missing the dollar threshold answers only part of the question. The 1099-NEC filing requirement itself applies only to payments made in the course of your trade or business. Personal payments aren't reportable at all, regardless of amount.

That distinction matters more for landlords than it does for most other 1099 filers, because whether owning and renting a property rises to the level of a "trade or business" isn't a bright-line rule. It's a facts-and-circumstances determination that has been litigated and written about for decades, generally turning on things like how many properties you own, how actively and regularly you manage them, and whether you're conducting the activity for profit with regularity and continuity, not just holding one investment property.

The Schedule E instructions ask filers directly whether they made payments during the year that would require filing a Form 1099, and direct anyone unsure whether they were required to file to the IRS's General Instructions for Certain Information Returns. They don't themselves spell out where a landlord's rental activity falls on the trade-or-business line. That's a meaningful gap for a Torrance owner with one or two rental units trying to self-assess.

What this means in practice

A Torrance landlord who owns and self-manages several rental properties, treats it as an ongoing, regular activity, and pays a handyman $2,000 or more during 2026 for repair work is on solid ground assuming the trade-or-business threshold is met and should plan to file Form 1099-NEC for that contractor.

A landlord who pays a handyman less than $2,000 total during the year for nonemployee compensation generally has no 1099-NEC filing obligation on that job under the current threshold, independent of the trade-or-business question.

A landlord with a single rental property, managed passively, whose activity might not itself amount to a trade or business, sits in the least settled territory. The dollar threshold isn't the deciding factor there; whether the underlying activity counts as a trade or business is. That determination carries real consequences beyond 1099 filing too, including how the activity is treated for other tax purposes, which is exactly the kind of fact pattern worth walking through with a preparer rather than guessing.

What doesn't change

Regardless of the threshold, Form 1099-NEC has never applied to payments to corporations for most types of services (with some exceptions, like payments to attorneys), and it's never applied to material-only purchases where no services are being compensated. A handyman operating as a sole proprietor or a single-member LLC taxed as a disregarded entity is generally the kind of payee this form is built for; a licensed contractor operating as a corporation generally is not, though attorney payments are a notable exception to the corporate carve-out.

Getting a completed Form W-9 from any contractor before you pay them, regardless of how large you expect the job to be, is still the practical way to have the information on hand if the total crosses the threshold later in the year.

FAQ

Is the $2,000 threshold for 1099-NEC in effect right now, for 2026?

Yes. According to the current Form 1099-NEC instructions, the $2,000 threshold applies to tax years beginning after 2025, which covers payments made during calendar year 2026.

If I paid a handyman $1,800 across several small jobs during 2026, do I need to file?

The threshold applies to total payments to that person during the year, not per job. $1,800 in aggregate stays under the $2,000 threshold, so no 1099-NEC would be required on the amount alone, assuming no other reporting trigger applies.

Do I need to file a 1099-NEC if I only own and rent out my one property?

That depends on whether your rental activity is considered a trade or business, which the IRS instructions don't resolve with a bright-line rule for landlords. This is genuinely fact-specific and worth confirming directly with a CPA rather than assuming either way.

What happens if I should have filed and didn't?

Missing a required information return can carry separate penalties under the Internal Revenue Code, in addition to the underlying reporting question. If you're unsure whether a past year's payments required a 1099, that's also a conversation for your preparer rather than something to guess retroactively.

Does getting a W-9 from the handyman mean I automatically have to file a 1099?

No. A W-9 collects the information you'd need if a filing requirement applies. Collecting it doesn't itself trigger a filing obligation, but not having it on hand can make filing harder later if the threshold and trade-or-business tests are both met.

This is general information, not tax advice. Confirm your specific trade-or-business status and your 1099 filing obligations for 2026 payments with a CPA before you file.

Topics: taxes, 1099-NEC, rental property, independent contractors

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