No. They properly included all payments to you on the 1099. You can now deduct the supplies that they reimbursed you for as expenses. If they would not have included it and would have just reimbursed you, then you would not be able to claim the expenses. But the proper way to do it is to account for all your income and expenses.
Basically, all money in is all the money you take in whether it is for reimbursements or labor. And all money out, is an expense when it is for supplies or other costs associated with doing business.
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