A Form 1099 Misc should be filed for every unincorporated vendor or contractor who you paid $600 or more during the calendar year 2017. The amounts to be reported are for services only. If you paid someone for products and services, only the labor charges are to be reported in box 7 of Form 1099 Misc. Reimbursements for expenses and purchases of products are not subject to the 1099 reporting requirements. 1099 forms are also required for rent payments to unincorporated landlords.
This is an area the IRS has started to concentrate on. Many taxpayers who are behind on their school loans, income taxes or child support will work as independent contractors instead of W2 employees so their earnings cannot be garnished. The IRS and State tax authorities are aware of this and have started increasing their focus on catching non-reporters of payments. The failure to report payments to vendors can result in the assessment of significant penalties as well as criminal charges.