The above question was about a rental asking if they need to send Form 1099.
Taxpayers with rental property are not necessarily obligated to issue Form 1099.
Business owners are obligated.
The question was about NOT issuing Form 1099 and if they had needed to, they did not issue an "unnecessary" one.
1. No, it does not eliminate an expense. The expense is listed regardless if Form 1099 was issued or not.
2. Again, in this question, there is no Form 1099. None was issued. But regardless, the IRS gets a copy of Form 1099 and looks to see if the income is reported.
For example, if I issue you Form 1099-MISC or Form 1099-NEC reporting a 1,000 payment, the IRS will look at your tax return and make sure you are entering at least 1,000 business income. (Then you might report 600 in expenses so the profit would only end up being 400.)
Again, you are correct that when a business pays someone, that becomes a business deduction which lowers taxable income, but you don't NEED a tax form to claim the expense.
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