IOLTA account to advance expenses and the 1099 NEC

[rohitsn]

Hi all,

It is that time of the year when my clients are asking for my W9, and I'm getting the 1099 NECs for money that isn't earned but rather money that is expensed on their behalf to the government. For context, I'm an immigration attorney who provides services to these clients. I bill them for Government Fees to USCIS using my trust account and then write those checks to the government. None of this money is earned. How do you deal with this. 

Any answers would be appreciated. 

[DaveF1006]

To clarify, who issues the 1099 NEC to you.  Is it the government?

[rohitsn]

No. This is from the company

"XYZ Company has issued a form 1099-NEC for you for tax year 2023 using Track1099, an IRS-approved vendor."

[AmyC]

You are a lawyer so you will add the 1099-NEC forms as income and write off the money paid out as as expense.

Helpful links:

Small Business and Self-Employed Tax Center - complete guide

•  About Schedule C (Form 1040), Profit or Loss from Business ...    
• Publication 535, Business Expenses