How to I handle a 1099-MISC that is for reimbursement of expenses?

[chirajay]

I received a Form 1099-MISC for some seasonal work that I did in 2017 in addition to a W-2 from my primary employer.  The amount on the 1099 is reported in box 7 and represents reimbursement of expenses that I incurred while doing the seasonal work (actual payment for the work done was received in 2018).  I've never received a 1099 before.  How do I handle this in Turbotax? I don't want to pay tax on this reimbursement of expenses.

[TomYoung · Accepted solution]

"(actual payment for the work done was received in 2018)"

If you did not have "constructive receipt" of the money in 2017 then legally it's not reportable by you until 2018.  The payee may have written the check in 2017 - triggering the reporting requirement - and even mailed the check in 2017 but if you did not receive the check until 2018 then it's not reportable.

If you want to go ahead and simply report the amount as 2017 income in any case then simply enter the 1099-MISC exactly as it reads.  The amount will show up as "revenue" on Schedule C.  Schedule C also allows you to deduct any legitimate costs you incurred in earning that revenue so you simply deduct those costs on that same schedule.  The result is that you're only taxed on your "work".

Tom Young

[chirajay]

Thanks Tom.