Auto Repair Shop Books Cleanup The other shop still gets paid

Collected here, owed there

A sublet is work another business did on a car your shop took in. Alignments, glass, towing, and some calibrations show up this way. The customer ticket includes the sublet. Your bank deposit includes what the customer paid you. The other shop's bill is still sitting in the inbox. If you call the whole customer price your labor, you have claimed income for work you did not do, and you still owe the bill.

Two honest shapes exist. Show the full customer amount and show the sublet as a cost. Or show only what you kept as income, and keep the pass-through off the labor line. Pick one shape and use it every time. Mixing them inside one month makes the labor margin jump around for no operational reason. We will help a shop pick. We will not leave both shapes in the same week.

The information return

The other shop is not your employee. A payment for services can be reportable. The 1099-NEC instructions are the page that carries the threshold. It is $2,000 when the shop paid in 2026, and $600 when the shop paid in 2025. The year of the payment picks the threshold. Section 70433 of Public Law 119-21 is the statute that raised it. Merchandise you bought for resale, such as a filter you installed yourself, is not the same payment as a service another shop performed. We do not tell a shop to paper the parts house for inventory purchases. We do tell a shop to look at the alignment shop once the year's payments cross the line that applies to that year.

Payroll is a different pipe. The technicians on your floor are paid by the payroll provider you already run. A sublet vendor is not added to that payroll to avoid a form. Setup of payroll stays setup. The provider runs payday.

What settles it

Bring your ticket, the other shop's bill, and a note of how much you have paid that shop this year. We will say which of the two shapes you are in, and whether the form threshold is a this-year question or a last-year question.

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