Contract labor includes payments to persons you do not treat as employees (for example, independent contractors) for services performed for your trade or business. Do not include contract labor deducted elsewhere on your return, such as contract labor that is part of legal and professional services, repairs and maintenance, or cost of labor that you will report elsewhere on Schedule C. Also, do not include salaries and wages paid to your employees.
You must file Form 1099-MISC, Miscellaneous Income, to report contract labor payments of $600 or more during the year.
See 1099 MISC Instructions for more information at http://www.irs.gov/uac/Form-1099-MISC,-Miscellaneous-Income
