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I received a 1099-MISC for reimbursed expenses
I received a 1099-MISC with box 7 filled in from my company. This amount however is for reimbursed expenses (plane ticket, hotel, food) I spent out of pocket for work. I worked as a FTE for the company, not self-employed/contractor/freelance. I'm wondering if this was a mistake? I've never received a 1099-MISC before for reimbursement, this makes it look like I was being paid more money per year than I actually was. And it makes it look like I didn't pay taxes for this reimbursed amount.
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I received a 1099-MISC for reimbursed expenses
Yes, it was a mistake and you can try getting your employer to correct it, but they'll, most likely, just tell you that's the way it is. But, that may be be a bad thing. The
IRS considers anything in box
7 of 1099-MISC to be self employment income. Enter the 1099-Misc
income, at the 1099-MISC screen under "Other Income"/1099-MISC,
select "My Business". TurboTax (TT) will complete Schedule C for you
and allow you to deduct any expenses associated with this income. You'll also
have to pay self employment tax (social security) on any profits greater than
$400. The good news is: by doing it this way you get to deduct your travel
expenses directly from the income, on schedule C. If you report the income any
other way, your expenses are only deductible as an itemized employee expense,
subject to the 2% of AGI threshold. Since this "Business activity" is
"not for profit", you may not deduct more than the 1099 amount. That
is, you can't show a loss. If your expenses do exceed the 1099 amount, you
could theoretically deduct the excess as an itemized deduction, but it's
unlikely that you would exceed the 2% of AGI threshold.
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I received a 1099-MISC for reimbursed expenses
Yes, it was a mistake and you can try getting your employer to correct it, but they'll, most likely, just tell you that's the way it is. But, that may be be a bad thing. The
IRS considers anything in box
7 of 1099-MISC to be self employment income. Enter the 1099-Misc
income, at the 1099-MISC screen under "Other Income"/1099-MISC,
select "My Business". TurboTax (TT) will complete Schedule C for you
and allow you to deduct any expenses associated with this income. You'll also
have to pay self employment tax (social security) on any profits greater than
$400. The good news is: by doing it this way you get to deduct your travel
expenses directly from the income, on schedule C. If you report the income any
other way, your expenses are only deductible as an itemized employee expense,
subject to the 2% of AGI threshold. Since this "Business activity" is
"not for profit", you may not deduct more than the 1099 amount. That
is, you can't show a loss. If your expenses do exceed the 1099 amount, you
could theoretically deduct the excess as an itemized deduction, but it's
unlikely that you would exceed the 2% of AGI threshold.
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I received a 1099-MISC for reimbursed expenses
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I received a 1099-MISC for reimbursed expenses
I am amazed at these responses indicating a 1099 was, indeed, correctly issued. It clearly was not. A 1099 is NOT issued for reimbursed expenses.
From the IRS Instructions: Employee business expense reimbursements. Do not use Form 1099-MISC to report employee business expense reimbursements.
In terms of reporting, I would not put it into the tax program at all. The revised 1099 is on file in your account and the IRS auditors have access to it.
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I received a 1099-MISC for reimbursed expenses
In reb's case he was able to get the employer to correct it. He should wait until his company corrects it, and not enter it in TurboTax (TT)at all, as it will be 0. That may also save him from having to use a more expensive version of TT in 2014 (all other years, a lesser version of TT could be used).
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I received a 1099-MISC for reimbursed expenses
You state "how the contracting world works".
That appears to makes you situation different from reb's (the original poster) situation. He was a W-2 employee, who got a 1099-misc for expense reimbursement.
In the case of an independent contractor and/or a contract employee, a 1099-Misc is usually correct for expenses. The "employer" should report all payments to the contractor. It's then up to the contractor to deduct his expenses on schedule C.
You DON'T report the company to the IRS and "let the IRS deal with them". That makes unnecessary effort for you, the company and the IRS and guess who the IRS is going to mad at! You simply deduct it on the schedule C you already have to prepare.
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