I have received 1099-MISC form for reimbursement of travel expenses for job interview. How should I report it to make sure I don't pay any taxes on this?

[AnnetteB]

Since the reimbursement was reported on Form 1099-MISC and the IRS has a copy of that form, they will expect to see it reported on your tax return.  That does not mean that it should be included as taxable income though, especially since you have all of the receipts and documentation to provide (if asked) that show it was a reimbursement and not income to you. 

Reporting this in TurboTax will be a two-step process, first to include the 1099-MISC as income and then to make a negative adjustment to remove it. 

To include the 1099-MISC as a part of your tax return, follow these steps:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)

• This opens a box where you can type in “1099-MISC” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)

• The search results will give you an option to “Jump to 1099-MISC"

• Click on the blue “Jump to 1099-MISC” link

• Answer Yes you did receive a 1099-MISC

• Fill in the details from your 1099-MISC then click Continue

• Provide a short description for the reason you received the 1099-MISC then click Continue

• On the next screen titled, “Does one of these uncommon situation apply?” choose the last option, None of these apply and then click Continue

• On the next screen asking if the 1099 involved work like your main job, answer No and click Continue

• On the next screen, check the box that you received the income in 2015 and then click Continue

• Finally, choose “No, it didn’t involve an intent to earn money” and click Continue

• Answer the questions on the next couple of screens to finish the process

Now the income shown on the Form 1099-MISC has been added to your return.  Next, it will be “removed” from the return.

Follow these steps:

• Go to Federal Taxes > Wages & Income and scroll to the bottom of the screen to the Less Common Income section (expand the section by clicking Show More if necessary)

• Click Start or Update beside Miscellaneous Income, 1099-A, 1099-C

• Scroll to the bottom of the list and click Start or Update beside Other Reportable income

• Answer Yes to move forward

• Enter a brief description, such as “reimbursement adjustment,” and the amount reported on the 1099-MISC as a negative number then click Continue

• Click Done

When you see your Form 1040, the amount shown on the Form 1099-MISC will be reported twice on line 21 – once as a positive amount and once as a negative amount. 

[jhoeft10]

Hi,

I followed instructions. However, when I entered the negative 1099 value for the adjustment, TurboTax did not recognize the negative impact and therefore the I'm taxed on the value still.  Any further recommendations to offset the job interview expenses that my employer 1099 me on?

[ColeenD3]

@jhoeft10

Look at your 1040. It should look like this example.

[Hal_Al]

@jhoeft10  Actually you do need to pay tax on it. Under the tax law (effective 2018), job hunting expenses are no longer deductible.  So, you should not make the negative entry, at all. 

If the amount is in box 7 (it should be in box 3), be advised that The IRS considers anything in box 7 of 1099-MISC to be self employment income. TurboTax (TT) aggressively steers you in that direction, even if the amount is in box 3.  But if you follow the steps in AnnetteB's reply, for entering the 1099-Misc, TT will treat it as "other income" not self employment. 

[jhoeft10]

@ColeenD3 

Thank you for the note. The 1099-Misc does show $0, but the Federal Tax due does not recognize the Adjustment.  e.g. the negative value does not reduce tax liability.

[BCteacher]

I received a Form 1099_MISC for a travel expenses for a summer educator conference.  The amount received covered flight and hotel.  I've declared in on my tax form, but am also being taxed for it.  Is there another step to declare the expenses of the travel.  It was not income.  Nor, was it related to my current employer.

[Hal_Al]

@BCteacher  -  Who paid you and why? 

So far, you haven't described anything that would allow you to deduct any of your travel expenses. As described in the answer to the original post, you received income and that makes it taxable, particularly when documented on an IRS form (1099-misc). 

I sounds like it was a prize, stipend or grant and those are taxable. 

[Tax Attorney - Ohio]

Interview expenses paid or reimbursed by a prospective employer are not taxable income. This is not affected by the elimination of the miscellaneous deductions. See Pub 525, page 34 Job Interview Expenses. As long as the reimbursement is less than or equal to actual interview expenses, there is no taxable income. 

Note: if you receive a 1099-NEC for job interview reimbursement and enter it in Self Employment, it will trigger QBI and Self Employment taxes. Must put both the payment and negative amount in Other Common Income to avoid this.