Where to record the 1099-NEC info for deduction for what I paid to a contractor for my rentals?

[jonequest2]

I am in the process of amending my 2024 tax return. I filed late at night/tired and forgot I had to claim a deduction for payments made to a contractor to do a lot of work on my rentals. The amount of the 1099-NEC is just over $30,000. I had other write offs as well from my spreadsheet, and actually had a loss on the apartment building. But when I just added his labor to my expenses it doesn't change my taxes owed at all? I had an extra hit this year because I took a 401k disbursement so I owe a lot more because of that $35,000. Does the fact that I had even deeper losses in one business not help offset taxes owed from my other income from another business and the 401k income? One other thing I forgot was a small royalty of about $70. When I add that $70, it sure adds $12 to what I owe, but the $30,750 I paid to a contractor makes no change at all. I also don't see a way to record all the info like his SS# etc. from the 1099 I sent to him. 

[DawnC]

You don't need to enter his SSN on your return, only the amount of expense is recorded.   Rentals are a passive activity and losses from passive activities can only offset passive income.   The losses will carry to future years and you can use them when you sell or otherwise dispose of the property.  

• Losses not allowed in the current year may be carried forward to future years.
• Modified adjusted gross income (MAGI) limits apply, capping the special allowance** at $100,000 or $50,000 for those filing as Married Filing Separately.

Passive Activity Losses

**There are a couple of exceptions to the passive activity loss rules that are designed for landlords. First, if you “actively participate” in a rental property activity, you might be able to deduct up to $25,000 of passive activity loss from nonpassive income, such as wages. However, the $25,000 amount is gradually phased out if your modified adjusted gross income is more than $100,000 ($50,000 if you’re married and filing a separate tax return).   

Effect of Passive Activities Losses

[jonequest2]

Thanks for the advice. So where would the money I paid him be recorded as a deduction?

[Vanessa A]

You would enter the costs in the expense section of the rental property.  

Depending on what you paid them for, will depend on how you deduct the fees.  

If you paid them for repairs and maintenance, you would add the expenses as repairs and maintenance.

If you paid them for capital improvements, it would be listed as part of the new asset cost.