removeps-groups[at]yahoo.com wrote:
- quote -

Per my previous reply check Pub 463. One side or the other of the
transaction has the 50% limit.

-Mark Bole

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On Mar 10, 8:47 am, Rich Carreiro <rlc-n...[at]rlcarr.com> wrote:

- quote -

Good point. Regarding the person who reimbursed you (ie. the
employer), do they get the full deduction or 50%?

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AES wrote:
- quote -

Challenges more than welcome, that's how I learn.

Chapter 6 in Pub 463 has a section "Rules for Independent Contractors
and Clients" which contradicts what I said as it pertains to travel,
gift, and entertainment expenses, so I stand corrected on that. I don't
believe any other types of "expense reimbursements" for a non-employee
would fall under this category, however.

As to the other part of the OP's question, if he is deducting standard
mileage for travel (not transportation -- see Pub 463) and getting
"reimbursed" for gasoline, those payments would be reportable income.

-Mark Bole

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AES <siegman[at]stanford.edu> writes:

- quote -

And that's why I believe what you're doing isn't correct.

There are some travel costs (like meals) which are not 100%
deductible by a sole proprietor.

So if you simply don't report the meals reimbursement (vs.
reporting the reimbursement and then taking the only 50%
deduction that's allowed), you're in effect getting a larger
deduction than you're entitled to.

--
Rich Carreiro rlc-news[at]rlcarr.com

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In article <XR1Bj.12111$Mw.8541[at]nlpi068.nbdc.sbc.com> ,
Mark Bole <makbo[at]pacbell.net> wrote:

- quote -

Don't mean to challenge you on this point (have no competence to do so).

But I've been providing occasional technical consulting services to
large firms for many years now (pre- and post-retirement as university
faculty member); submitting invoices which separated out and subtotaled
Consulting Services (billed at an hourly rate) and Travel Expenses
(itemized and with supporting receipts attached); been paid generally
with a single check for the total invoice; and in the vast majority of
cases received year-end 1099-MISCs which reported the Consulting
Services amount only, which I duly reported on my returns. (In the few
exceptions where the 1099-MISC reported the total amount, Consulting
plus Travel, I deducted the itemized travel costs as business expenses
in the appropriate subcategories on Sched C.)

If the usual approach is not legally valid, the firms and I both seem to
be misinformed about this. Net tax paid is of course the same either
way.

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"Mark Bole" <makbo[at]pacbell.net> wrote in message
news:XR1Bj.12111$Mw.8541[at]nlpi068.nbdc.sbc.com...
- quote -

Well, not exactly. According to RIA Checkpoint, an independent contractor
handles expense reimbursements about the same as an employee...

================================================== ==========
Independent contractor accounts for the expense. If an independent
contractor accounts to his client for the expense, and is reimbursed for it,
the expense and reimbursement are not taken into account by the independent
contractor (because the expense is the client's, not the independent
contractor's). The client may deduct the expense, if it is otherwise
allowable. If the reimbursed expense is entertainment-related, the client is
subject to the restrictions on deduction of meal-and-entertainment expenses.
37 For these rules to apply, the reimbursed independent contractor must
substantiate each element of the reimbursed expenses ( ¶ L-4705 ) by
adequate records ( ¶ L-4616 et seq.) or by his own statement supported by
sufficient corroborating evidence ( ¶ L-4626 et seq.). 38
================================================== ============

Thus, if Joe Shmoe bills his client and submits receipts, and is reimbursed
dollar for dollar, the expense reimbursement should not be included in the
1099.

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Joe Schmoe wrote:
- quote -

Whatever you charge your client(s) to provide your product/service is
gross income to you, and most likely deductible to them. Reimbursements
only apply to employees.

-Mark Bole

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I am a self-employed contractor who home offices and deducts
expenses--typically hotel, standard mileage, and m&ie per diem--for my
business trips.

This year I have a unique situation in that one of my clients will
reimburse certain travel expenses. This will be a straight
reimbursement based on my submittal of expense receipts, there is no
advance or flat per-job amount.

What's not clear to me is whether the client has to separate their
payments to me at the end of the year or simply roll it all into the
1099 amount.

If it's all on the 1099 it seems to me that I would need to deduct my
hotels and other expenses as I normally do, since the reimbursement
would be part of my income. Maybe this is the simplest way to do
things? I'm not sure. Is there another required form or method in this
case? It doesn't seem to exist in the IRS pubs, I've been combing
through them for a few hours today.

I'm also wondering about getting reimbursed for gas costs and whether
this affects my ability to take standard mileage deductions. In this
case I'd just treat the money as income and not deduct the cost of the
gas for tax purposes, while taking the standard mileage. Would that be
considered "kosher"?

Any help/comments appreciated.

Joe

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