Should Contract Labor Expenses (1099-MISC) only include the labor amount, and not material cost? Neither Contractor estimate nor invoice separates these.

[12rkdouglas]

I hired a contractor to make repairs and renovations on my rental property.   For generation of 1099-MISC and entry into Contract Labor Expenses, must I separate the labor amount from any included material cost, and if so, how would I do that if the contractor doesn't tell me?

[CherylW · Accepted solution]

No, you must not.

The reason is he is reporting it as labor and cost of goods, what ever he uses to figure that.  The contractor has to report that on his return.

This example illustrates that:

...if you hire a plumber and pay them $5,000 to install a water heater you will report the total $5,000 in box 7 of the 1099-MISC.  Include both the parts of the payment that are for labor and materials provided by the plumber.