Can I expense labor under de minimis or just the materials?

And to answer your question about the labor and materials, what matters for a 1099-NEC is the total amount you paid the contractor, not how they broke it out on their invoice.

The labor market description was also subtly revised: job gains are now described as having “remained low,” while the unemployment rate is said to have shown “some signs of stabilization,” a shift from December’s acknowledgment that joblessness had edged higher.

When you look at how capital and labor are reallocating, a few things stand out clearly.Data center construction is now running at roughly a $42B annualized pace—up close to 20% year over year—and has tripled since late 2022.

Waller strongly disagreed with that change, warning that labor-market deterioration remains a real risk.What’s the bottom line?

The effect is slow and cumulative.In power-first, rural sitings like Iowa or Washington's Columbia Basin, data centers are located primarily for electrical capacity rather than labor or population proximity.

Occupancy is heavily seasonal (Memorial Day to Labor Day), and insurance, property taxes, and HOA restrictions have gotten tougher in the past few years.

The University of Michigan’s January sentiment reading inched higher for a second straight month, signaling modest improvement, but confidence remains deeply depressed versus a year ago as consumers continue to cite high prices and a softening labor market.

Many owner builders reduce risk by hiring licensed subs for higher risk work and using insured day labor through a reputable labor service rather than paying individuals directly.Before you move forward, it would be wise to spend an hour with a construction focused attorney and an insurance broker who understands owner builder projects in that specific state. 

While inflation argues for caution, softer labor data gives the Fed flexibility.