I am an independent contractor on a 1099 and was required to do some travel where all flight, airfare and meals were expensed and reimbursed by the company that hired me. I received my 1099 and it includes the reimbursed amounts for expenses incurred during the business trips. Does this mean I can include the travel expenses in the Expenses portion of Schedule C? Thank you so much for any light you can shed on this.
Claiming expenses reimbursed on a 1099
Answers
Simple answer yes.
You should be talking to your
Thanks very much Wayne. I didn't realize we couldn't ask tax questions here. I noticed a few others did so I just followed suit. Thanks again for your help.
You can, but anyone answering would say the same thing - talk to you tax advisor, because they are the one you'll turn to if one of our answers doesn't pan out correctly.
Hi Mira,
There are two choices -
1. Ask your firm to issue a corrected 1099-Misc. They are obligated to comply. This is the easiest option.
2. If your firm balks at reissuing due to misunderstanding the rules, then your other option is to report the 1099-MISC for the value reported on your Form 1040, then show a second row on your Form 1040 as backing out that value. This will comply with the IRS document matching rules and achieve the result of zeroing out the incorrect 1099-MISC amount. Totally acceptable. Then you will need to report the correct income amount on your Form 1040 as taxable. So you will report 3 lines (+$Incorrect - $Incorrect + $Correct). Because you will be reporting 3 rows, you may need to show the calculation on a statement and attach the statement to your return. Not sure if you are using a Schedule C or the Form 1040.
If your firm reissues the 1099-Misc after you have filed your tax return, be sure the amount they reported matches what you filed. If they again errored, then the IRS will send you a notice and you will need to respond to it within the number of days required.
There you go.
Valerie
Filed Under:
FP&A