How do I claim reimbursed expenses on my S Corp 1120S? Is it included in Gross receipts or sales and deducted under "other deductions" or somewhere else on the form?

[jennipilot]

I'm confused how to deduct reimbursed expenses on my 1120S.  I am a pilot and charge all my travel expenses back to my clients.  When they cut a check its for my services and my reimbursed expenses.  Do I include services+reimbursed expenses under my Gross sales and receipts and deduct the expenses somewhere on the 1120S?  If so, under which line is correct?  I've seen conflicting information on the internet.  I'm wondering if I need to add reimbursed expenses to line 19 "Other Deductions" statement or if it belongs somewhere else... i.e Other Income (loss) or COGS, etc.  First timer here.. Thanks!

[stephenmillerla]

I would have the travel expenses and their re-imbursement recorded in a separate account for each job, which goes to having a nil effect in your cash book. As that account would also have a nil balance, there is no need to record it on the tax return, yet you have an audit trail for your accountant and the IRS.

[Jason999]

I have the same problem. How did you deal with these reimbursed expenses? My reimbursed expenses are NOT part of 1099-Misc. They were wired to my S-Corp's bank account (reimbursed by another company that my S-Corp provides services to). I am not so sure If, I can just not report them at all.

Turbo Tax has an entry for "Reimbursed Expenses Received", but that amount just gets added to total income and later I would need to deduct those expenses as Business Travel Expenses. However, I would like to avoid that.

[Critter]

ALL income received for any reason is reported as income and ALL expenses reported as expenses EVEN if you bill for them separately.  That is the correct way to report it on the tax return AND in your bookkeeping and will keep you from being audited and or be easily supported in an audit.  Seek local professional guidance in getting your books set up correctly and to get educated in how to keep them. 

[Critter]

Turbo Tax has an entry for "Reimbursed Expenses Received", but that amount just gets added to total income and later I would need to deduct those expenses as Business Travel Expenses. However, I would like to avoid that.

Avoiding it is not an option ... even if you simply make one expense entry of " reimbursed expenses" ... remember to keep accurate records in case of an audit.