As an LLC owner with my husband, can I mark our income as a contract expense?

Unless you reside in a community property state ( Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin), you need to be filing a Form 1065 for your multi-member LLC.

Your ordinary business income will be passed through to you and your husband on Line 1 of Schedule K-1, which you will input into your individual income tax return (Form 1040).

In addition to what @Anonymous_ has stated, you are correct in that members of an LLC are not employees.

If you are "paid", this is treated as a guaranteed payment to the member.

This is reflected on page 1 of the 1065, Sch K and also on the appropriate member K-1.  This income is treated as ordinary income and also as self-employment income.

You do not issue any form 1099 to yourself.  Just want that to be clear since you reference "we are paid like a subcontractor...."

Understand that an LLC, be it single member or multi-member is not a separately taxable entity. The IRS considers an LLC to be a disregarded entity. It is merely a pass through entity where all profit/loss as passed through to the members.