Where do subcontractor payments go on Schedule C?
Line 11 — Contract labor
Amounts paid to independent workers who are not your employees go on Schedule C Line 11, 'Contract labor'. This covers subcontractors, freelancers, and one-off specialists you hired for the business. If you paid an individual or unincorporated business $600 or more during the year for services, you generally have to issue an information return (Form 1099-NEC) and collect a Form W-9 before you pay. Employee wages go on Line 26 instead.
Examples
- An electrician you subcontracted on a remodel.
- A second shooter on a wedding.
- A freelance designer who built your logo.
Watch out for
- Collect a W-9 before the first payment, not in January.
- Misclassifying an employee as a contractor carries real penalties.
- Contract labour that becomes part of goods you sell may belong in cost of goods sold.
Stop guessing the category
DocuSpending reads each receipt and assigns the Schedule C category for you, then totals the year on demand.
General information, not tax advice. Amounts, limits, and percentages change between tax years — check the current IRS Schedule C instructions or ask a tax professional about your situation.
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