Can I fully deduct money paid to a sub-contractor on his 1099-Misc that was paid to me on my 1099-Misc from a client with whom I do business?

[2notsniw]

A client of mine included the cost of a sub-contractor to me in my 1099 Misc. I have filed a 1099-Misc on the sub=contractor but I am not getting the full deduction for the sub-contractor's 1099 - an expense to me.

[DS30 · Accepted solution]

Yes - You will need to include the money paid to you as income and claim a deduction for the full amount that was paid to the sub-contractor by entering the amount you reported on the 1099-MISC that you sent out to your sub-contractor under contract labor under business expenses.

If the 2 amounts are equal, then they should net to Zero. Just switch to forms mode and review Schedule C to see if the amounts match (what is being reported as income and what is being reported as contract labor expense).

Remember , you will be able to deduct any business expenses that relate to and are used in your profession that are considered "ordinary" and "necessary" to your work.

Please refer to this IRS link for more information about Business Expenses