On Schedule C, Line 11 is designated for reporting "Contract Labor" expenses. This line includes payments made to individuals or entities you do not treat as employees—such as independent contractors—for services performed in connection with your trade or business. These payments must be for services directly related to your business operations.
Key Guidelines for Line 11
- What to Include: Total cost of contract labor for the tax year, such as payments to freelancers, consultants, or independent contractors.
- What to Exclude: Do not include contract labor that is already deducted elsewhere on your return (e.g., on lines 17, 21, 26, or 37). Also, exclude salaries and wages paid to employees—those should be reported on Line 26.
- Reporting Requirement: If you paid $600 or more in contract labor during the year, you must file Form 1099-NEC to report these payments to the IRS and the contractor. For details, refer to the Instructions for Forms 1099-MISC and 1099-NEC.
Source:
Schedule C Instructions (2025)
Disclaimer: Always verify details with the current year’s IRS Form and Instructions, as well as your state’s Department of Revenue. Tax rules may vary by jurisdiction and individual circumstances. For complex situations, consult a CPA or tax attorney.