Tallie LLC questions 1-31, #12

[Tallie]

12. How should I handle expenses reimbursed by clients, particularly when those expenses are reported as income on my 1099? Are there specific considerations for reimbursed expenses related to work attire and other materials used exclusively for my work on cruise ships?

[KimberW]

You would report your total income from your customers. It's important to report the income that appears on 1099s because those are also being sent to the IRS.

Then, you will report your deductible expenses to reduce your income. But, you may be able to get your clients to pay for expenses that are not deductible on your tax return. For example, referring back to your earlier question about clothing worn exclusively on cruise ships: clothing is deductible if it is required for work and if it is unsuitable for everyday wear.

It isn't possible, though, to turn a non-deductible expense into a deductible one by having a client pay for it through a reimbursement.

Thank you for participating in this event!

-- KimberW

[LindaSh]

To add to the discussion, clothing can only be deducted if it cannot be used as everyday wear.  A good example of this is uniforms or protective clothing.

An example of deductible uniforms would be if an employer required you to wear all black, such as blank pants and black top, you would not be able to deduct this as it can be worn anywhere.  However, if the employer had the name of the business on the top, then the top could deducted.  An iceskater's costume can be deductible as well as their skates provided they are only used for their performances.

An example of protective clothing would be overalls worn by auto repair mechanic, hard hats, or protective shoes.  

Here is a IRS publication which will be helpful to you:  https://www.irs.gov/publications/p529