Indépendant Contractor Reimbursements

[nobodyyouneedtoknow]

Hello,

I am a cleaner, I clean an office where I have been fronting supplies (toilet paper, trash bags, paper towels, etc) with my personal credit card(bad idea I know, they always reimburse very late).

The client did not itemize expense reimbursements, instead lumped them into my wages. I itemized supplies on my invoices. Do I need to reach out to the client to correct this? I do have records/receipts of every single purchase. I know I can deduct my own business expenses that I pay for, such as gas, but shouldn't supplies reimbursed be itemized separately?? Thank you so much

[Vanessa A]

No.  They properly included all payments to you on the 1099.  You can now deduct the supplies that they reimbursed you for as expenses.  If they would not have included it and would have just reimbursed you, then you would not be able to claim the expenses. But the proper way to do it is to account for all your income and expenses. 

Basically, all money in is all the money you take in whether it is for reimbursements or labor.  And all money out, is an expense when it is for supplies or other costs associated with doing business. 

[nobodyyouneedtoknow]

Thank you so much for your input. To ensure I'm understanding, personal business expenses such as gas to drive to work, cleaning supplies under my business but for a different property which weren't reimbursed, as well as reimbursements from this client are under the same deductible umbrella? 

Thank you again!

[nobodyyouneedtoknow]

What I've been reading contradicts what you said. I am still unsure! 

Should reimbursements to sub-contractors be included in 1099 tracking?

No, UNLESS the Payer does not keep track of these expenses using an accountable plan (substantiation such as receipts are provided). If you DO track these expenses using an accountable plan, there is no need to include these amounts on a 1099-MISC or 1099-NEC. 

[Vanessa A]

The accountable plan is up to the payer to decide IF they are keeping track.  They may not be. This is not a requirement.  They may just lump it altogether which is perfectly acceptable as well. So if they are not tracking it separately, they would be in the right to include all of it on your 1099.  This means you would need to deduct your expenses.  

In the end, your total profit is the same.  It does not change how much you profit since you will be deducting what you spent on the supplies that they paid you for and included in your 1099. 

Yes, if you are self-employed, then all of this would be included as expenses for your business.

Your expenses would include mileage (ONLY that which is directly related to your business), or if you prefer to use the actual expense method gas and oil changes and vehicle expenses, supplies, phone, advertising, etc. Basically any expense that is directly related to your business NOT YOUR PERSONAL expenses would be deductible. 

You do not need to separate your expenses based on client, instead you would group them together like 30 bottles of dawn dishwashing liquid used for 20 clients would all be one expense.  

If you have a W-2 job, then the expenses incurred to go to work as an employee are NOT deductible neither are expenses incurred to do your job as a W-2 employee.