Do Auto Repair Shops Need to File a 1099?

Do auto repair shops need to file a 1099? The answer is yes, even if the value of the services is relatively small. When you pay your workers as 1099 contractors instead of as W2 employees, you must inform the IRS of this fact. The IRS is aware that auto shops are one of many types of businesses that may misuse the 1099 independent contractor classification. If an audit is conducted, it could lead to serious consequences.

For example, if you purchase auto parts from a local dealer and one of your employees repairs the vehicles, you must file a 1099. This applies to any type of service provider, such as a car mechanic who repairs the company's truck or an electrician who comes to add outlets in his office. Filing a 1099 is an important part of running an auto repair shop. It ensures that you are compliant with IRS regulations and helps protect you from potential legal issues. It also helps ensure that your employees are properly compensated for their work.

Kimberly Philabaum
Kimberly Philabaum

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