1099-NEC reimbursed expenses

[climateofwine]

Hello,

A company invited me to give a talk and agreed to pay for travel expenses and provide an honorarium. On the 1099-NEC they included both the expenses and the honorarium. If I put this on my 1040 as income, then I will be taxed on the expenses twice. Should I ask the company to provide a 1099-NEC without the reimbursed expenses, or how do I account for them when I do my taxes?

Thank you

[KathrynG3 · Accepted solution]

Yes, the details of your self-employed income & expenses section should accurately report this situation.

To start, you must report the full amount of Form 1099-NEC. (For example 100 honorarium + 10 travel) The IRS received a copy of Form 1099-NEC and will look to match this on your return.

Next, report the travel expenses as usual in full. TurboTax will subtract it for you from income. Do not otherwise adjust the travel for being paid privately and reimbursed. (as an expense, this would be -10, which is the same as -10 +10 -10)

The result would appropriately not allow for an expense that was reimbursed, but not "overcharge" for the additional income.

For more information, see: Tax Topics for Freelancers, Contractors, and Consultants

[LaurieP13]

If you report the entire amount in Quickbooks as income and then list the travel expenses as an expense, is the taxable amount taken from the income reported amount to pay in my quarterly tax?  It seems like that is what it is doing.  I travel almost every week and am contracted - so income and travel expenses are put together. 

HELP!

[VolvoGirl]

It doesn't matter for the quarterly estimated payments.  Estimates are just to cover any tax due on your return.  If you pay in too much estimates you will get a refund.  The actual taxable income amount is based on your schedule C Net Profit after expenses.  

[Mbar13]

Thank you, this did it for me 

[gdstriker]

I have basically the same question.

I have the version for Home and Business and my wife received an 1099-NEC that has both her pay and conference expenses she is being reimbursed for.  I know I put in the total from this but do I put the reimbursements in the section for Business Expenses?  This is my first time dealing with this issue.

Thanks

[VolvoGirl]

Yes but don't double any expenses you enter separately.  Enter the expenses she got reimbursed for.

[gdstriker]

Thanks for the quick response.  

She was reimbursed for meals so I assume that goes in the 100% column and all the rest of the expenses will be deducted 100% from the NEC total.   That is what I understand.  

[olsontf]

If I received a 1099-NEC in 2021 for work that was completed in Dec 2020, can I deduct the business expenses for this work in tax year 2021, even though the business expenses were paid for in 2020?

[PattiF]

No, you are required to report the expenses when they were paid. Since the business expenses were paid in 2020, they should be included in the return from that year.

[tornado226]

One thing I can't quite figure out is where this information actually goes on the DESKTOP version of TurboTax.

I input all my info for the 1099-NEC. I have the same scenario as the original post. There were reimbursements. Those values were added into my Nonemployee compensation.

I don't know where specifically in the desktop version of TurboTax I put those in. There IS a page where I can put reimbursements in, but it just added to my federal amount due so that couldn't be right.

[VolvoGirl]

Either enter reimbursements under Supplies or whatever category they fit or put them under Other Misc expenses on Schedule C .  I don't know what reimbursements page you entered them on.