Hi, I’m seeking clarification on the tax treatment for reimbursements and additional costs as a mystery shopper. I understand that I’ll receive a 1099-NEC that includes both the reimbursed expenses (like meals) and payments for my services.
Reporting Income and Deductions: Since the 1099-NEC includes both my reimbursed expenses and pay, I plan to report the full amount on Schedule C as business income. Then, I would deduct the reimbursed expenses to avoid paying tax on that part, as well as any unreimbursed expenses like parking or mileage. Is this approach correct?
Standard Deduction vs. Itemizing: Can I still take the standard deduction in addition to deducting these business expenses on Schedule C, or would I need to itemize instead?
I’d appreciate it if you could confirm or correct this approach and clarify any parts I may have misunderstood. Thank you for your help!
