How do I exclude expenses from a 1099.

You can map the accounts you want on your 1099's by going into Edit, Preferences and then selecting 1099 forms, company preferences.  From there you can map which accounts you want.

Thank you! I've been hunting for the way to map this to multiple accounts. Your post got me to the right place.

If the sub submits actual invoices for reimbursement, they can be excluded.  If they are billed on his invoice, they are included.

depends on the written contract - labor only or time and material.

I am going to have to start responding completely or not at all. In the "general contractor" / "sub-contractor" scenerio a  number of subs want 2 checks - one for labor and the other for material - assuming that the only thing to be reported is labor.  I've explained to them that it doesn't work that way. 

Per my conversations with IRS - if the sub pays for material & turns in "original vendor receipts" the purchase can be reimbursed and excluded.  If the sub turns in his own company  invoice for material,  there is an assumption that it is marked up and would not be a "dollar for dollar" reimbursement.  In that scenerio the payment for materials must be included.

What about if it is your IT contractor who has done upgrades to your server and also bought other items for you (like TB drives, replacement DVD-RW drive, etc.)? Do you include that amount in your 1099 amount or just the amount you paid for his services. The materials and sales tax were included on his invoice, but I do not believe that we received original receipts as he picks them up for us.

 That is a very good analysis Jan.   

Ok. My question is how do I remove it from the 1099 amount in Quickbooks?  There must be some way to catagorize it so that it doesn't show up on the 1099?  I tried Mapping but there is no 1099 box for "supplies".

 If you insist on removing it from the 1099, you have to split the check into contract labor and supplies.  Map the labor, don't map the supplies.  It will show on your report as uncategorized but won't be on the Form 1099.  

You would have to separate the amounts to different accounts in QuickBooks when you write the check (or afterwards you can go back and separate them).  So, let's say your vendor gives you an invoice for $500 for labor and $398.00 for materials (and according to DEJan728 you get the original invoices from the vendor) you would write the check for $898.00, but on the distribution you would show the $500 as the expense account mapped to the 1099 and then you wuld record the $398.00 to a separate account that is not mapped to the 1099.  If you don't have a separate account not mapped to the 1099, create one.

Thank you.

In the IT scenerio, I would include the materials on the 1099.  If the sub is giving you their own invoice and charging "sales tax" that is a strong indicator that there is "mark up" and they purchased the items for  "resale." 

Correct...payments to hotels, airfare, bus, etc. do not go on a 1099.