Hi all

I am fairly new to this business and I have questions in regards to my tax filing

1) I read some thread saying that the 1099 is based on each MSP, by MSP I am assuming for the company who paid me such as Intouch Insight, 36-Ralay & Mystery Shopper Service right?

2) If I accept jobs from the same MSP via multiple different platform (ISS, their own SESSIE), would they group everything together by the end of the year?

3) Do all of MSP provide 1099 as long as I have transaction with them over certain amount?

4) If I am required to make purchase on some of the jobs, would I be able to write them off as business expenses?

1. yes
2. yes if over $600 if not you will need to group them together yourself
3. yes, all over $600
4. no

kisekiNecro @ Jun 21, 2023, 2:28:26 PM

Hi all

I am fairly new to this business and I have questions in regards to my tax filing

4) If I am required to make purchase on some of the jobs, would I be able to write them off as business expenses?

Yes you CAN write them off as business expenses, *as long as they are not reimbursed.* You know how the job will list both "compensation" and "reimbursement" -- as long as "reimbursement" is zero you can write off the expense, or you can write off any amount you spend over the reimbursed amount. The "compensation" is income and the unreimbursed amount is expenses, even if you have a net loss at the end of the year.

Thank you very much!

Yea, that's not what my accountant said. Regardless, I would confirm whatever information you receive here with a tax professional as it's your skin on the line at the end of the day.

I'd really like to know more about how others do this as I've heard both (yes and no). I used to prepare taxes LONG, LONG ago and the IRS has lots of rules but often has room for common sense.

My concern is if I make enough to get a 1099 and compensation fees and reimbursement amounts get reported as one figure. Then I obviously want to whittle out those reimbursements that were not of any use to me and truly only incurred as part of the business objective.

There are services where I definitely benefited, say a $30 car wash. Yeah, I needed that so probably fair to consider it compensation. But there are others where I purchased (minimal) fast food and dumped it right in the trash or paid for an eye exam that I didn't need (and wouldn't trust). Those are up front expenses that only exist as a business necessity, not a benefit to me personally.

Also, no one has mentioned mileage. Do you track and claim business mileage?

Right now I'm keeping a spreadsheet of my shops with quite a bit of detail. I guess I'll figure it out when tax time comes!

There's couple things that is involved with the whole make a purchase and reimburse thing

For 1) If it is just regular purchase, reimburse and get paid for it, If does seems like I am going to be report everything as "income".

2) If my expense exceed the reimburse amount, it kind of go against me, althu I do feel like I should be able to write it off because it is a lost to me(I earn less from this project)

3) Lastly, let's say I did a project, got careless and didn't met the requirement and not getting paid....now that expense should definitely be able to be written off correct?

And yes, I always keep track of business mileage

My big question is how it's reported on the 1099 (assuming dollar threshold is met). If I have $1000 in fees and $500 in reimbursements, what amount does the 1099 show?

In most business situations, I'd expect reimbursements NOT to be reported as income. But if it were, then I'd want to report the related expenses on my taxes.