If they used an Accountable Method of Reimbursement and paid you the expenses in exchange for receipts they should not have issued a 1099. If they did not apply the accountable method you will have to report this income in Schedule C and enter expenses to avoid being taxe.
There are two courses of action that you can take in this matter.
- You can approach the company that issued the 1099-MISC and have them rescind the amount through a correction. If they agree to correct this keep in mind that it will take quite some time for the correction to reflect at the IRS.
- If they choose not correct the 1099 you will have to file as Self-Employed with Schedule C. You will enter the $757 as Income and enter the amounts from the receipts as Expenses. If you have all of your receipts, this will provide you with the opportunity to zero out any income therefore not having to pay any taxes.
