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User1218
Returning Member

I receive a 1099-Misc with income in Box 3 from manufacturers' that I sell for in my regular job. Can I deduct expenses against this income? Ex.business gifts, meals,etc.

I am in sales and receive a 1099-MISC from some manufacturer's that is reported in Box 3.  I have always reported it as "other income" but some of my coworkers said they claim it on Schedule C and deduct expenses for meals, business gifts, etc.  Can it be reported that way?

1 Reply
rjs
Level 15
Level 15

I receive a 1099-Misc with income in Box 3 from manufacturers' that I sell for in my regular job. Can I deduct expenses against this income? Ex.business gifts, meals,etc.

No, you cannot report it on Schedule C. You have been reporting it correctly. You are an employee. You are not self-employed, and you do not have your own business.

You cannot deduct expenses because the new tax law eliminated the deduction for employee business expenses for 2018 through 2025.

Your coworkers have been doing it wrong. Reporting it on Schedule C gives them a place to deduct expenses, although doing so is improper, but they are also paying an extra 14.13% self-employment tax on the net manufacturers' payments after expenses. It's not clear that they come out ahead overall. Whether or not they actually come out ahead, fundamentally they are cheating on their taxes and filing false tax returns.

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