Deducting internet business expense

[Anonymous]

My wife does a little data consulting for a company.  They provide her with internet service but the way they pay for it is by sending her a check.  This amount has been added to her 1099-MISC.  How do deduct for this?

[DanielV01]

Deduct the cost of the work-related Internet service as an expense.  Since the company has included this as income (and currently taxable) on the 1099, you need to show the expense on the Schedule C so that this is treated as a reimbursement.  This is common for companies to do, and it's the best treatment.  If their reimbursement is not as large as the expense, you get a larger deduction.  If it breaks even, then it is an even reimbursement.  If they reimburse more than what you spent, the remainder is taxable.  The entrepreneur has the responsibility to keep the records on this.