Received a 1099 NEC

[berrios222]

Received a 1099 - NEC from the company that manages the home next door. We had to have the fence rebuilt. The management company refused to pay anything until the fence was completed. I had to pay everything in advance and then get reimbursed.  Now I am being given a 1099 NEC as an independent contractor.  This is a problem because their share of materials is included in that 1099, not just the contractors fee.  A contractor was used for the project, but did not want them to send him a payment that included all the materials plus his time.  What do I do??

[RobertB4444]

Enter the 1099-NEC exactly as you received it.  The IRS received a copy of it and they will expect to see it on the return.  When you enter the 1099 you will tick the box on the 3rd screen that says "This is not money earned as an employee or as a self-employed individual, it is from a sporadic activity or a hobby (this is not common)."

Now you have income from the 1099 on your return without any self-employment tax.

Next, you'll go to the very bottom of the 'Wages and Income' list to 'Miscellaneous Income, 1099-A, 1099-C'.  Click on that and enter a description of "Reimbursed landscaping expenses" or something to that effect.  Enter the exact same amount from the 1099 as a negative number.

This backs the payment out so it is zeroed on your return and still reports the 1099-NEC correctly to the IRS.

@berrios222