Self-employment travel expense for income on 1099-MISC on Box 7

[LLL2010]

I did a consulting work as a self-employment, and got a 1099-MISC for the year 2010. I was reimbursed for the travel expenses by the company, but the company adds the travel expense to my actual consulting income to 1099 on Box 7 - Nonemployee compensation. Here are my questions.

(1) Even if I got reimbursed for the travel expenses, I believe that it should not be treated as my actual income and being taxed on. Should I fill out Schedule C to add an expense for this income so that the amount listed on Box 7 will be lowered to my actual consulting fee?

(2) I throw out all my original receipts because I did not expect the company add my travel reimbursement amount on 1099-MISC so that I have to claim the expense myself on my tax return. But I did copy those receipt when I fax it over for reimbursement, so I did have the copied version of my receipts.

(3) I have most of my receipts for Taxis (the copied one not the original one), but I lost 3 of them. Can I still add the amount of these 3 into my expenses even if I could not find the receipts?

(4) One of my travels is done in 2009, but I did not get paid until 2010 (I did not get 1099-MISC in 2009). So I did not put those travels in 2009 as self-employment expense in my 2009’s return. Can I add the travel expense for 2009 to the travel expense in 2010 (they are belongs to the same project, that are paid in 2010), and file it as an expense in my 2010’s return?

(5) I was reimbursed for the actual cost of meals using the actual receipt, am I still eligible to use the standard meal allowance (which is $71/day on www.gsa.gov) to enter my meal expenses on Schedule C? Or do I have to use the Actual cost Method to enter my meal expenses because that is the method I got my reimbursement?

(6) I was reimbursed for the actual cost of hotels using the actual receipt, am I still eligible to use the standard lodging allowance (which varies seasonally averaging $220/day on www.gsa.gov) to enter my lodging expenses on Schedule C? Or do I have to use the Actual cost Method to enter my meal expenses because that is the method I got my reimbursement?

(7) I stay in one night for each of my travels, which means that for each travel, the two days I am staying with my client are both categorized as “arrival and departure†dates. If I am using the standard meal allowance method, do I need to prorate the meal expense by ¾ for each day?

(8) If I am using the actual method, do I need to prorate the meal expense by ¾ for each day?

(9) No matter which method I use to calculate my meal expenses, Turbo Tax changes it to 50% of the total meal expense. Is there a way to change this 50% to 100% because if I use the 50% limits, the final calculation will not take the travel expense out of my income in full. That is, after the travel expenses are entered, the amount show as my self-employment income is still more than the consulting income I actually received.

[HelenO]

Lots of questions, let's take them all separately.  First of all, the companies you did work for did the 1099s correctly.  They paid you expenses, it goes on your 1099.  

1. This is income and you will reduce it in the body of the Schedule C.  
2 and 3 - copied receipts are fine.  If you know you paid the taxi, go ahead and take the cost.  Just know that the IRS can disallow it if you are audited on that item.  

4. No, the expenses are 2009 expenses (and paid in 2009) so you cannot use them for 2010.  You need to amend the 2009 return.

5, 7, 8 and 9. Since you were reimbursed actual meals, you need to use actual meals.  And you do not have to use only 3/4s, you can use the entire amount you billed.   And you, as the end user, will have to take the 50% haircut on these meals.  That is just tax law.  

6. SE individuals may NOT use per diem for hotels, so you must use actual.