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Should association give board member of 1099 tax form?

Posted on Fri, Dec 07, 2012 @ 07:56 AM

If a condo association pays a board member (treasurer) $1,000 a month for their services. Should a 1099 Tax form be sent to the Treasurer?




posted @ Friday, December 07, 2012 8:16 AM by Bill

Actually, Board Members should not be paid. If you are paying that person, they need to not be on the Board. 

posted @ Friday, December 07, 2012 8:19 AM by Christy Crum

First of all let's clarify something. HOA Board of Directors are volunteers, period. Minimally a Board of Directors consists of a President, Vice-President, Secretary, and Treasurer. Sometimes the positions of Secretary and Treasurer are the same person. 
If the HOA is paying someone to do the financials for the HOA they are a Bookkeeper or Accountant, not Treasurer. 
Why you may ask? Treasurers have a term of office and typically can only be recalled by members or let their term expire. With a Bookkeeper or Accountant they maintain their position until they are fired or their contract is not renewed. 
Can the Bookkeeper also be Treasurer? Sure but that is like hiring family members to run your business. It can be done but how do you fire them? 
And the final reason is to pay the bookkeeper a competitive salary or fee. With the Treasurer doing the financials how do you know what you are paying is competitive? 
This person you are paying is a contract employee of the HOA and as such is owed a 1099.

posted @ Friday, December 07, 2012 8:31 AM by Ron - NC

Our Board president has granted himself a contract to do landscaping without the benefit of competitive bidding. I am unaware of any vote every being taken that would grant him approval. He manipulates the Seniors via fear, bullying, false friendliness, and favors granted. Voting methods are controlled by him and so he cannot be removed. We have no modern methods of communication such as e-mail, website, newsletter. Parking systems are not in place so he threatens to tow cars if he does not like you. I have seen others say similar things. What am I to do? This place is hell but the market is dead.

posted @ Friday, December 07, 2012 8:34 AM by Ihatecondo's

I forgot to mention that Indiana seems to not care to protect us from Condo abuses, which seem common.

posted @ Friday, December 07, 2012 8:36 AM by Ihatecondo's

Our condo's Bylaws permit paying board members if approved by the membership at an annual meeting so answer here would be..yes. BUT...since very few members show up at annual meeting but board does, it is most likely approval would always occur. And,of course, the guys who OK'k the job in the first place get to vote to approve it again. Pretty dumb.

posted @ Friday, December 07, 2012 8:48 AM by R

I find it hard to believe that somewhere in the statutes of the state of Indiana there are provisins to prevent the development of a fiefdom.

posted @ Friday, December 07, 2012 8:55 AM by Frank - MA

We pay our Treasurer a nominal fee--$50 a month--because he actually does the lion's share of the work for our small condo building board. This was agreed upon by the entire Board and is in our bylaws. That said, we hire an accountant to do our taxes and anyone making over $600 a year (so our maintenance guy and landscapers) receive a 1099. Of course now I'm realizing our Treasurer is making $600 a year and wonder if therefore he needs a 1099 too...

posted @ Friday, December 07, 2012 10:28 AM by Julie

NE is like IN , a red state with 
condo laws that do nothing to protect consumers or condominium unit owners.

posted @ Friday, December 07, 2012 11:07 AM by john mastro

Additional to my previous comment: 
One of the Directors on our Board is the Building Committee Chairperson. It is a committee of one only because there is not a significant amount of workload. All he does is report to the Board on any physical issues with the buildings that he sees. Ideally he should be doing more in terms of investigation of possible solutions to resolve or prevent but as a volunteer and not having time or desire to do more, it is what it is. Other Directors and our management company fill the voids. 
The HOA Board has also contracted with that same Director to provide a cleaning service; vacuuming, dusting, polishing, replacing light bulbs, and so on. There is a written contract that the Board approved, with the involved Director abstaining, after several other bids fell short on price. Our contractor is paid by check written by our management company on behalf of our HOA. And he receives a 1099 at the end of each year. 
Can we fire him, you bet. 
The point is that this gentleman wears two hats; one as Board Director and the other as the cleaning contractor. They are two separate and distinct responsibilities as well as titles and we all do a good job of preventing conflict of interest.

posted @ Friday, December 07, 2012 11:33 AM by Ron - NC

Yes he needs to be 1099'd.

posted @ Friday, December 07, 2012 4:49 PM by Mark

In NJ it is legal for a treasure to be paid. It may depend on how much and the type of work he does as treasure.

posted @ Friday, December 07, 2012 4:58 PM by Victor

Under IRS regulations you are required to file a 1099 on any individual who is paid 600.00 or more. If the 1099 is not filed the Association could be liable for taxes and penalties.

posted @ Friday, December 07, 2012 6:36 PM by Bill

$599.00 = No 1099. $600.00 or over = Yes 1099.

posted @ Saturday, December 08, 2012 8:13 AM by Frank - MA

A second thought: I don't know the laws of every state but in MA you should also be carrying Workman's Compensation insurance if, indeed, you have any employees. An IRS 1099 form is a bona fide evidence that you have an employee.

posted @ Saturday, December 08, 2012 8:20 AM by Frannk - MA

Thanks for the answers, guys--am glad the original poster thought to ask this question. I'm enjoying reading this blog and seeing the solutions to problems that arise in various types of condo setups! I'm in my first year as president and am just learning that we've never sent 1099s to anyone (!!!) so I'm making an effort to clean this stuff up. Just wish I had more than 1 or 2 residents who actually care.

posted @ Monday, December 10, 2012 9:37 AM by Julie

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