topic Re: 1099-misc for discount program in Get your taxes done using TurboTax

1099-misc for discount program

gstampede10 — Wed, 05 Feb 2025 18:45:16 GMT

When I worked for a previous employer over 7 years ago. A vendor partner with that company allowed us to be apart of a discount program that gives 75% off. They claim that having that program in place that if the MSRP of what I purchase thru this program is $600 or greater, they're going to send a 1099-misc as this to them is considered taxable income. I spent about $9000 last year outfitting a media room ($12000 MSRP) and they issued a 1099-misc. I can't find any info anywhere stating that the IRS considers this taxable income. I don't work for the prior company and the two are not affiliated. A long time ago, they used to issue credits as a part of sales performance but I was not apart of that program and never received compensation. This is just a discount site that I still have access to due to the fact they never audit current employees vs. former employees. I have a lot of friends that have received 1099's from them and they say they have never once filed them. It doesn't make sense to me. If I go to bed bath and beyond and buy $2000 worth of red tag items for 75% off, I wouldn't be liable to consider that taxable income, I don't see how this is any different.

Re: 1099-misc for discount program

MaryK4 — Wed, 05 Feb 2025 22:33:37 GMT

This would most likely fall under the category of a fringe benefit. Fringe benefits received in connection with the performance of your services are included in your income as compensation unless you pay FMV for them or they’re specifically excluded by law. You should be able to reduce the amount by the Employee Discounts.

Re: 1099-misc for discount program

gstampede10 — Wed, 05 Feb 2025 22:51:01 GMT

Gotcha. And even though I am no longer working there and haven't for 7 years so I am no longer receiving any compensation of any kind from that prior employee, this would be considered a fringe benefit still from a prior employment relationship?

Re: 1099-misc for discount program

ThomasM125 — Wed, 05 Feb 2025 23:07:38 GMT

The income reported to you does not appear to be compensation, as you are not required to perform services to receive it. Consequently, if anything it would be a gift that would not be taxable to you. It does seem that you are simply purchasing items at a discount which would not be associated with taxable income. It might be wise to report the Form 1099-Misc on your tax return and then enter a negative adjustment to other income to cancel out the income to avoid the IRS form inquiring about it though. This is how to enter the adjustment:

1. From the Federal menu in TurboTax find Wages and Income

2. Find Less Common Income

3. Choose Miscellaneous Income, 1099-A, 1099-C

4. Choose Other Reportable Income

5. Enter a description of the subtraction and the adjustment as a negative number

Re: 1099-misc for discount program

gstampede10 — Wed, 05 Feb 2025 23:37:22 GMT

Thank you Thomas!