How to Track Contractor Wages and Payments in DeductFlow
Most STR hosts pay cleaners, handymen, and property managers as independent contractors. Managing those payments carefully—collecting W-9s, tracking the 1099-NEC filing threshold ($2,000 for payments made in 2026), and generating 1099-NEC summaries—is a legal requirement and a significant deduction. Here's how to do it in DeductFlow.
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Who Counts as a Contractor for 1099 Purposes
| Worker Type | 1099-NEC Required? | Notes |
|---|---|---|
| Cleaner / housekeeping (individual) | Yes (if $2,000+ in 2026) | Most common STR contractor |
| Handyman / maintenance (individual) | Yes (if $2,000+ in 2026) | Includes plumbers, electricians (sole prop) |
| Property manager (individual or LLC) | Yes (if $2,000+ in 2026) | Single-member LLC treated as individual |
| Cleaning company (Inc. or S-Corp) | Generally No | Corporations exempt from 1099-NEC* |
| Contractor paid via Airbnb co-host | No | Airbnb handles their tax reporting |
Threshold: under IRC §6041(a), Form 1099-NEC is filed for a contractor paid $2,000 or more in 2026 ($600 for payments made through 2025; the $2,000 is indexed for inflation starting in 2027). See the IRS instructions for Forms 1099-MISC and 1099-NEC.
*Check the W-9—if the business is an S-Corp or C-Corp, box 3 or 4 will be checked. Attorney fees to corporations are still 1099-reportable regardless of entity type.
Step-by-Step: Tracking Contractor Payments
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1
Add a Contractor as a Vendor
Navigate to Contractors > Add Contractor. Enter:
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- Legal name: Must match their W-9 exactly (individual name, not nickname)
- Business name: If they operate under a DBA
- TIN: SSN (individuals) or EIN (businesses)—confirm via W-9
- Mailing address: Where the 1099-NEC copy will be mailed
- W-9 on file: Check this box once you've collected their signed W-9
Save the contractor profile. They now appear as a vendor option when logging expenses.
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2
Log Each Payment
Every time you pay a contractor, log it in DeductFlow:
- Navigate to Expenses > Add Expense
- Select the contractor from your vendor list
- Enter the amount, date, and description (e.g., "Cleaning – 3 nights, April 2026")
- Category: Contract Labor maps to IRS Line 11
- Property: assign to the correct STR if you have multiple properties
- Attach a receipt or payment confirmation if available
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3
Monitor the 1099 Alert Threshold
In the Contractors section, each contractor shows a running payment total for the year, and DeductFlow flags contractors who reach the year's 1099-NEC threshold ($2,000 for 2026; $600 for payments made through 2025).
Collect the W-9 before the first payment rather than waiting for the flag. Exceptions exist (payments to corporations, or made by card or payment app, for example), so confirm with your CPA which contractors get a 1099-NEC.
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4
Generate the 1099-NEC Summary Report
Navigate to Reports > 1099 Summary. Select the tax year. The report lists:
- Contractor name and TIN
- Total payments made during the year
- Payment method (check, ACH, Venmo, etc.)
- W-9 on file status
- Any contractors with missing TIN flagged
Download as PDF and share with your CPA, who will prepare the actual 1099-NEC forms and file copies with both the contractor and the IRS by January 31.
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5
Export for Filing via 1099 Service
If you or your CPA uses a 1099 filing service (Tax1099, Yearli, Gusto, etc.), export the contractor data as CSV from DeductFlow and import directly into the filing platform. The CSV includes all required fields:
- Recipient name and TIN
- Box 1 NEC amount
- Address for paper copy mailing
- State and state ID if required
E-filing is required for filers submitting 10 or more 1099 forms (as of 2024 IRS rules). For smaller portfolios with fewer than 10 contractors, paper filing is still permitted.
W-9 Information to Collect for Every Contractor
- Legal name (Line 1 of W-9)
- Business name / DBA (Line 2, if applicable)
- Federal tax classification (sole prop, LLC, corporation)
- Taxpayer Identification Number (SSN or EIN)
- Current mailing address
- Contractor's signature and date
No credit card required
Prove it.
1099 Season Starts Day One—Track Every Payment
DeductFlow tracks contractor payments year-round, alerts you early as contractors approach the 1099-NEC threshold, and generates the 1099 summary your CPA needs to file on time. No scramble in January.
Start Free TrialFrequently Asked Questions
When do I need to issue a 1099-NEC to my cleaner or handyman?
You must issue a 1099-NEC to any individual or unincorporated business (sole proprietor, LLC, or partnership) you paid $2,000 or more for services during the calendar year (for payments made in 2026 and later; the threshold was $600 through 2025). Corporations (including S-Corps and C-Corps) are generally exempt. The deadline to provide the 1099-NEC to the recipient and file with the IRS is January 31.
Do I need a W-9 before paying a contractor?
Yes. Collect a completed W-9 from every contractor before making the first payment. The W-9 provides the legal name, TIN, and address needed to issue a 1099-NEC. If a contractor refuses to provide a W-9, you must withhold 24% of payments as backup withholding and remit to the IRS.
What if I pay a contractor through Venmo, Zelle, or PayPal?
If paid through payment apps (Venmo, PayPal, etc.), the payment processor may issue their own 1099-K to the contractor if thresholds are met. However, you are still required to issue a 1099-NEC if the contractor received $2,000+ in services from you in 2026 or later ($600+ through 2025), regardless of the payment method. Don't assume the app's 1099-K replaces your filing obligation.