I received a 1099-misc from the City of Los Angeles for a rebate from their sidewalk repair program. It reimbursed me for a portion of the total work done. Is the amount on the 1099-misc really taxable? If not, how do I enter the info to avoid being taxed? Thanks!
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If you received a 1099-MISC from Los Angeles for a sidewalk repair rebate, its taxability depends on its purpose. The rebate isn't taxable if it reimburses out-of-pocket expenses with no prior tax benefit (e.g., no deduction claimed). However, it's taxable if it reimburses expenses previously deducted (e.g., for business or rental property purposes) and must be reported. See article on taxable vs. nontaxable income.
Steps to enter the 1099-MISC as nontaxable (if appropriate) in TurboTax:
If you received a 1099-MISC from Los Angeles for a sidewalk repair rebate, its taxability depends on its purpose. The rebate isn't taxable if it reimburses out-of-pocket expenses with no prior tax benefit (e.g., no deduction claimed). However, it's taxable if it reimburses expenses previously deducted (e.g., for business or rental property purposes) and must be reported. See article on taxable vs. nontaxable income.
Steps to enter the 1099-MISC as nontaxable (if appropriate) in TurboTax:
@SabrinaD2 what a great and helpful response—thank you so much!
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