I was doing sales & business development under an agency agreement with a company for 3 days/week, for about 3 months. As well as invoicing them a daily rate. I separately submitted expense reports for mileage at the $0.54/mile rate to and from meetings, software costs, nominal monthly rate of $50 for phone use etc. and received payment for this. I went on to be employed directly full-time and submitted for expenses in exactly the same manner.
- Should the expense reimbursements for the 3 months appear on the 1099 they send me in the same way as payments I received for work?
- Can I claim tax deductions on this these expenses or is that somehow "double claiming" because I have been paid for them as expenses?
- If I can claim deductions, total expenses as a contractor came to $851 for the year. Do I need TT Self-Employed and is it worth it for such small amount? (currently use TT Premier.)
- Do I have to declare expense reimbursements received once a full-time direct employee?
thanks.
Yes, you need TT Self Employed if using the Online version of the program. As for claiming your expenses, if your reimbursements are included as taxable income, then you can claim your expenses to offset the taxability of those reimbursed amounts.
If your reimbursements are NOT included as taxable income to you, then you can only claim the difference between what you were reimbursed, and what you actually paid. If the amount reimbursed equals or exceeds what you actually paid, then you can't claim any of it.
Thanks Carl, I appreciate the advice. To be clear, if they do not include the expenses in taxable income on the 1099-MISC, and there is no difference between the amount reimbursed and what I paid in expenses, then do I still need TT Self Employed?
I was doing 3 days per week, for 3 months so the work place deduction will be tiny. Is there any other benefit or, more to the point a *requirement* to get TT Self Employed? Can I not declare 1099-MISC income without incurring the additional expense?
Generally, employers include reimbursed expenses as part of your W-2 wages. But if they report it separately (and they can), then from what I understand about the online version of the program (and I could be wrong) you *have* to use TTSE to report the 1099-MISC income, if that income is reported in box 3. If it's reported in box 7, then TTSE is not necessary. (I may have the box numbers backwards too).
But you specifically state you were "Working as a contractor for 3 months.". You were self-employed then, and all of your income for that specific time you were "working as a contractor" would be reported to you on a 1099-Misc. In that case, TTSE is your only choice if using the online version of the program.
If using the CD/Download version of the software that you physically install on your computer, then any version will meet your specific need
@rjs check me on this please.
I'm not sure what you want me to check.
I believe that you can report 1099-MISC box 7 self-employment income in TurboTax Online Premier if you have no expenses at all. But most companies will include everything that they paid you while you were self-employed, including the expense reimbursements, in the 1099-MISC. If they do that, you should definitely use TurboTax Self-Employed. With $851 of expenses, the amount of tax you save by deducting the expenses will be many times more than the additional cost of Self-Employed.
If you use the CD or download TurboTax software you could use any edition if you are comfortable entering your self-employment income and expenses without the extra guidance that you would get with TurboTax Home & Business or the Online TurboTax Self-Employed.
@rjs from what I see in the original post, it starts "working as a contractor for 3 months in 2016". TO me, that's an automatic SCH C minimum, even if only for one day. But like you said, depending on the business expenses, as well as depreciable assets if any,, that will determine the cheapest version that can be used. Personally, I would recommend either Desktop HOme & Business or online Self-Employed if this is the first time dealing with this. The extra help alone will be worth it for that first time.
Carl, I agree with your recommendation of Home & Business or Self-Employed. Maybe my previous post wasn't completely clear. Working as a contractor certainly does require Schedule C, no matter what. But it's doesn't necessarily require Home & Business or Self-Employed, even using TurboTax Online. Online Premier or Deluxe can produce the required Schedule C (or C-EZ) if the income is in 1099-MISC box 7 and there are no expenses at all. If there is business or self-employment income that is not reported on a 1099-MISC, or if there are business expenses, then Self-Employed or the CD/Download software is required.
thanks RJS & Carl. I'll stop trying to scrimp on dolling out for TT Self-Employed and make the most of it's advantages.
rjs - unless I've been misinformed (and that's highly possible) my understanding with the online version is that to file the full SCH C requires TT Self-employed. I haven't been told this, but for the SCH C-EZ it's my understanding that the online versions of Premier & Deluxe can be used. It's also my understanding that the TurboTax qualifications for the SCH C-EZ are tighter this year.