Where do I enter expenses for a business coach?

[jennie_f]

I hired a business coach last year and paid them $10,000. Where do I enter this expense? Under "Legal and Professional Fees" it says expenses for a business MANAGER can be entered who is not paid as an employee. Since they didn't manage my business but rather coached me on how to be more profitable in my business, that doesn't seem right. Where else can it go? Thanks!

[TomK100]

Put it in Contract Labor (Line 11) in the business expenses section.

Per IRS Schedule C instructions,  Line 11 (pg. C-7):

Enter the total cost of contract labor for the tax year. Contract labor includes payments to persons you do not treat as employees (for example, independent contractors) for services performed for your trade or business. Do not include contract labor deducted elsewhere on your return, such as contract labor includible on line 17, 21, 26, or 37. Also, do not include salaries and wages paid to your employees; instead, see Line 26, later.

You must file Form 1099-NEC to report contract labor payments of $600 or more during the year. See the Instructions for Forms 1099-MISC and 1099-NEC for details. L

[jennie_f]

Thanks so much @TomK100 ! They are an LLC that is taxed as an S Corp, so I shouldn't have to issue a 1099-Nec. Can I still enter it under contractor? 

[DianeW777]

Yes, you should enter that expense under Contract Labor. As you indicate, the instructions do not require you to issue a Form 1099-NEC for services performed for your business by a corporation (C or S).

• Instructions for Forms 1099-MISC and 1099-NEC

  • Exceptions.   Some payments do not have to be reported on Form 1099-NEC, although they may be taxable to the recipient. Payments for which a Form 1099-NEC is not required include all of the following.

    • Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation). However, see Reportable payments to corporations, later.