Reporting Income and Expense:

[hongcamai]

My husband is a general contractor. He hires some contractors for some of his work. So the amount he charges his customers including the sub-contractors' cost.  That money that he turns around and pays someone else is a wash. Should he exclude that amount from his income so he wouldn't have to expense it?

[Bsch4477]

Include the amounts as income and deduct on Schedule C as contract labor. 

[VolvoGirl · Accepted solution]

You have to report the full amount as income.   Then enter the Contract Labor as an expense.   Why wouldn't you want to claim it as an expense?

You need to give a 1099NEC to anyone you paid $600 or more to for the year. But not to corporations or for merchandise. You send the IRS a copy of the 1099Misc with the transmittal summary form 1096. These are due to the person by Jan 31 and to the IRS by Jan 31 also.

That is Contract Labor Schedule C line 11. You can just enter the total or list each one. Only the total goes to schedule C.