We have a 1099-Misc from helping a company. Purchased a few products for THEM; they included the reimbursement under box 7 as compensation. What category of Expense?

[stklinzing]

This should just be a product reimbursement, not actual compensation.  But they included it as Nonemployee Compensation.  Where do we deduct this?  We have no "home office" type expense where this would be our own equipment.  We also did not buy anything we're still holding on to as inventory.

[ToddL · Accepted solution]

You would have to be using TurboTax Self Employed to claim this expense.

Enter this expense (cost of items purchased for customer) in the Other Common Business Expenses interview  found under Business > Business Income and Expenses > Business Income and Expenses, Schedule C > "Your business" > Business Expenses.

Don't use "Inventory/Cost of Goods Sold". This section is really intended for manufacturers or retailers.

You can enter everything under "Other Miscellaneous Expenses" or use one of the other categories, if applicable (e.g. Commission.

See attached sample screen shots for navigation.