1099 for reimbursement work

[Troutn]

I had taken my camper in for some routine warranty work. I did not buy the Montana in my state, so taking it back to Indiana was not an option. I have had some local work done by the chosen approved repair center. I had also bought my first unit from them 22 years ago. Upon setting up the appointment, they told me that since they did not sell me the unit, that I would have to get reimbursed by Keystone. Since they do great work, I thought well no problem. They did a very nice job and also delivered the unit a week earlier than my date needed.



Here is where it gets interesting. I had submitted my claim to Keystone and was told that I needed to complete a W-9 for reimbursement-code for you have a 1099 coming and have to pay taxes on this.



I was asked about this further and was told....


As long as you are not paying for anything upfront and are needing a reimbursement, there will be no 1099 involved. Warranty work as long as it is approved by us to repair/cover we would not charge you for anything.



Just a lesson learned on my part, but not real sure how they can issue a 1099 for this?

[RKassl]

uh? I really don't understand this.

[richfaa]

i also do not understand but good information to know,

[Troutn]

Me too-doubt that it affects many people. Since I chose to buy out of state, comes into play specific to the chosen dealer for my warranty work. I am sure it is a money thing. They would do the repair work, but I had to front the money to pay them. It sounded ok to get reimbursed but not with a 1099 associated with this for sure. I really wonder if they can send me a 1099? It doesn't quite seem right for a reimbursement.

[DQDick]

Not sure either, but we did have work done by non Keystone dealers twice under warranty. Called and Keystone approved it. As soon as we sent them the bills, they sent us a check.

[waynemoore]

Ok I have been in the tax business for over 30 years. There should be no 1099 for a reimbursement for a repair. Only for work or service performed for that company. So the only 1099 should be to the person or company doing the repair. That said there are several ways to handle This 1099 on your tax return.
Talk to your tax advisor about this he/she will know how to advise you.

[Troutn]

Wayne, they did have a cover letter that recommended the same thing. I am my tax advisor, so if Turbo Tax doesn't help me, will likely have them prepared next year.

Thanks!

[waynemoore]

Good idea. Plus the new tax laws are going to make Turbo Tax people crazy.

[Troutn]

For sure!

[bethandkevin]

Originally Posted by waynemoore

Ok I have been in the tax business for over 30 years. There should be no 1099 for a reimbursement for a repair. Only for work or service performed for that company. So the only 1099 should be to the person or company doing the repair. That said there are several ways to handle This 1099 on your tax return.
Talk to your tax advisor about this he/she will know how to advise you.

Exactly. 1099 would be sent to someone for services rendered and paid for by the 1099 issuer. Seems like extra work for the tax preparer to balance the 1099 and the invoice for the repair.

[1retired06]

Pure BS

[mlh]

I’ve been giving out 1099s for over 30 years and have never heard of such a thing. I would like to know why? Maybe their accounts know something I don’t know. After all I’m just a machinist. New tax law? BS? If you find out please let us know.
Lynwood

[Mmwtdh]

Offset the 1099 income with the expense that you paid the repair center....

[Troutn]

Cover letter from Keystone....Keystone RV and Dutchmen Manufacturing, a division of Keystone RV, is a part of Thor Industries, a publicly traded company. We are required to have a FED ID number on record documenting who all payments are made too. This is done through the submission of a W-9 form. Note: By providing this information, it does not automatically indicate that any payment you receive from Keystone would be subject to Income Tax, however, Keystone cannot provide you with any tax advice so we would recommend you discuss your specific situation with your tax professional to determine your tax liability, if any, as a result any payments from Keystone RV Company.
In order for us to process your reimbursement, please complete and return the attached W-9 form. Personal information will remain confidential.

[woodman]

Originally Posted by Troutn

Cover letter from Keystone....Keystone RV and Dutchmen Manufacturing, a division of Keystone RV, is a part of Thor Industries, a publicly traded company. We are required to have a FED ID number on record documenting who all payments are made too. This is done through the submission of a W-9 form. Note: By providing this information, it does not automatically indicate that any payment you receive from Keystone would be subject to Income Tax, however, Keystone cannot provide you with any tax advice so we would recommend you discuss your specific situation with your tax professional to determine your tax liability, if any, as a result any payments from Keystone RV Company.
In order for us to process your reimbursement, please complete and return the attached W-9 form. Personal information will remain confidential.

The Keystone cover letter is correct. The 1099 form is generated from Keystone as an expense document (paper trail), since the repair shop is not listed as one of their certified service centers. Therefore, the money had to go through your hands to pay for the service work for warranty work outside of their network. It may seem odd, but that's how it's done by Keystone.

[KEG]

I'm a professional accountant NO 1099 needed!!!!'

[woodman]

THOR Industries, Inc., which is the world's largest manufacturer of RVs, has several subsidiaries including Keystone, whose former CEO, is now with THOR. THOR reportedly had a revenue of $7.25 million and a net income of $374 million in 2017 alone. Undoubtedly, they have CFO's, CPA's and attorneys on their payroll who make recommendations. My point was not whether a W9 or 1099 is needed or not, or whether it's right or not, they've chosen to use this method, and in the end, you get reimbursed, albeit a rather circuitous route. We had the same thing happen to us with Keystone, in 2016, and our tax attorney reported it as non-income. Lesson is to keep your receipts, just in case.