Mohan Gundu wrote:

- quote -

Since they issued a 1099-Misc, you should have taken the
expenses on your schedule C.

You only have a problem if you already took the expenses as
deductions and [tried to] ignore the reimbursement.

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lm_007[at]yahoo.com (Mohan Gundu) wrote:

- quote -

Two ways to do it:

If you account to your client for T&L expenses, and these
are paid separately, they aren't taxable to you and
shouldn't appear on your 1099. You don't deduct T&L expenses
the client paid, but you don't report the client-paid T&L as
income. This is similar to the treatment of an employee on
an accountable T&L plan. Not all clients will do this for
you. University and government institutions often prefer
this way, though.

If you simply bill the client time-and-materials, including
T&L, and the client sends you a check and a 1099 for your
total billing, the T&L amount is revenue, and your T&L cost
is expenses. Note that only one-half of meal and
entertainment expense is deductible this way.

--
Chris Green

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glm_007[at]yahoo.com (Mohan Gundu) wrote:

- quote -

File an amended return, and corrected Schedule C. Include
the 1099-MISC in gross income and add the actual travel
expenses to the expense section. This may (or may not)
change your Net Profit number (and subsequent SE and income
taxes) but is necessary to account to the IRS for the 1099
income.

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glm_007[at]yahoo.com (Mohan Gundu) writes:

- quote -

Include the reimbursement as gross receipts and deduct the
allowable expenses, both on Schedule C.

Phil Marti
Clarksburg, MD

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glm_007[at]yahoo.com (Mohan Gundu) writes:

- quote -

As a private contractor, you are treated as being in
business for yourself. Use Schedule C to report your income
and expense. This would include your travel and any other
business expense you may have had in connection with that
business.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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Recently IRS sent a letter to me saying I misreported my
taxable income. That amount in question was reported by the
company I was contracting for in 1099-MISC. I didn't even
bother to report the amount as it was not intuitive for me
to be paying taxes for the travel reimbursement (What was I
thinking ).

Is there any way to clear this up ?. What is the correct
procedure for travel reimbursements for non-employees ?

Thanks,
Mohan.

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