In the K-1 section of TurboTax, it says:
"Enter the reimbursements you received from this partnership in 2018:
- Reimbursements for Meals & Entertainment
- Reimbursements for Other Expenses "
When I enter in numbers for these reimbursements, why do they increase my taxable income? These are business expenses for which I was reimbursed, they should have nothing to do with my taxable income.
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IMO:
A Reimbursement would be seen as an increase in Taxable income if it is not offset with a corresponding deductible expenses.
for example, if you are claiming expenses - this would lower your taxable income. Subsequently entering the reimbursement it would offset the claimed expenses and ZERO out.
Say that I buy supplies for my business using my personal card instead of my company card. The supplies are used only for business purposes. One week later, I reimburse myself for the supplies purchased.
In the above example, should I pay taxable income on the reimbursement?
IMO: To your point, a reimbursement by definition corresponds to an expense. If it didn't have a corresponding expense, it would be an owner's distribution and not a reimbursement. So it should always have a net-zero impact on income. TurboTax's system for entering reimbursements doesn't appear to do that in my view.
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