dealing with Keystone Warranty dept. - Montana Owners Club

BiggarView · 02-23-2021, 10:33 AM

So, anybody out there get out of pocket warranty work done? My issue is the W-9 form they ask for to reimburse you for it and the resulting 1099Misc that gets issued. How do you handle it on your taxes? It's not income since it is repaying for out of pocket expenses to repair a warrantable defect. I can understand a W-9 if I was a contractor authorized by Keystone and submitting an invoice for parts and labor to Keystone to get paid for work done. But as owner paying out of pocket? Keystone clings to IRS tax code FATCA as the requirement... but FATCA is a reporting mechanism for income of independent contractors to ensure they pay their taxes on money earned doing work for a business. Mobile RV techs would fall into this category, but owners are not contractors.

Keystone is suggesting it is income. as such it would be taxable. Since I already paid taxes on the money to have it in my hands to start with, this results in double taxation of warranty reimbursements without an offsetting deduction.

Imagine going to the mom & pop grocery store and insisting on a W-9 from the store because I paid them money for groceries but I have to require evidence of the store paying its taxes on the money they received from me? This is the essence of what Keystone is doing with out of pocket warranty reimbursement.

OK, done venting.

**Carl n Susan** · 02-23-2021, 11:09 AM

This is not the first time this has come up. Here is a discussion from 2018. The conclusion is the W-9 is non-taxable.

https://www.montanaowners.com/forums...ad.php?t=74481

BiggarView · 02-23-2021, 11:19 AM

I hate paperwork drills.

**DQDick** · 02-23-2021, 09:36 PM

Tossed mine in the trash and never heard anything from anyone.

RMcNeal · 02-24-2021, 05:12 AM

It is more for them than for you. You can ignore it on your taxes. That really is a stupid regulation anyway.

SLB · 02-11-2022, 03:03 PM

I did receive a 1099 misc. showing income for repairs to a 2021 Keystone Montana DEFECTS and unfortunately will have to pay additional income taxes while Keystone saves money by selling defective fifth wheels. I am sorry that I bought one. The only good part is that I'm now out of warranty and will not have to deal with Keystone Customer Service.
Keystone gets the last ounce of blood (money)by issuing the 1099. More lessons learned

RMcNeal · 02-11-2022, 04:46 PM

You might talk to a tax professional about that. The 1099 is just informational and shouldn't be counted as income to you, as I understand it.

mlh · 02-11-2022, 05:06 PM

Montana is not picking on you. They are simply complying with federal regulations. If you do business you haft to comply. The only way around this is doing business with a corporation. I haft to send a 1099 to my brother. He is a sole proprietor, that is he isn’t a corporation. I’m a chapter S as most small to tiny business are.
Lynwood

SLB · 02-11-2022, 05:49 PM

IRS website does not show warranty repairs reimbursement as income.

JDDilly · 02-11-2022, 06:14 PM

If you get a 1099 you do have to claim it on your taxes. The Corporation will be reporting it to the IRS. You could take your chances and not claim it, but if the IRS catches it the will modify your taxes. In worst case, it could trigger an audit, which then can look back 7 years.

You were acting as an independent repair person when you did the repairs and got paid.

**Carl n Susan** · 02-11-2022, 06:16 PM

Quote:

Originally Posted by SLB

I did receive a 1099 misc. showing income for repairs to a 2021 Keystone Montana DEFECTS and unfortunately will have to pay additional income taxes while Keystone saves money by selling defective fifth wheels. I am sorry that I bought one. The only good part is that I'm now out of warranty and will not have to deal with Keystone Customer Service.
Keystone gets the last ounce of blood (money)by issuing the 1099. More lessons learned

Read the previous Posts. You are not liable for taxes on this 1099.

RMcNeal · 02-12-2022, 03:37 AM

Quote:

Originally Posted by mlh

Montana is not picking on you. They are simply complying with federal regulations. If you do business you haft to comply. The only way around this is doing business with a corporation. I haft to send a 1099 to my brother. He is a sole proprietor, that is he isn’t a corporation. I’m a chapter S as most small to tiny business are.
Lynwood

Not sure I understand the statement "The only way around this is doing business with a corporation." My business is incorporated since 1999. I still must comply with federal regulations regarding Form 1099. Anything over $600.00.

mlh · 02-12-2022, 06:38 AM

What I’m saying is you don’t send a 1099 to a corporation. Remember I said I send one to me brother. He isn’t a corporation. If he was I wouldn’t need to send him one.
Although this may not be a taxable event it still is a reportable event. The IRS has a 1099 for the OP and will need an explanation. What is this 1099 for?
Lynwood

RMcNeal · 02-12-2022, 06:42 AM

Gotcha. I get 1099's from other corporations to my corporation, but as an individual, I don't have to send 1099's to corporations that I deal with. That makes sense.

mazboy · 02-12-2022, 07:48 AM

this is another stupid government thing added to the irs.

it is a pain but just, explain and give it to your tax guy and let them deal with it.

JDDilly · 02-12-2022, 08:25 AM

This has been part of the tax code for as long as I can remember, and I had tax accounting classes back in the 80's. It is basically a W2 for independent contractors. When you do warranty work and get paid, you are acting as an independent contractor. If they authorized a repair tech to come out and do the repairs, they would send them a 1099 to report the income. When you get paid for work, it is income.

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