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1099/reimbursable expenses

1099/reimburseable expenses - previous bookkeeper charged reimbursable expenses to services and it shows up on our subcontractor's 1099's and it shouldn't. Can I adjust it in QB without messing anything up?


    I agree with raywhite28, but there are two theories here.  What dictates including reimbursed expenses in 1099 amounts is whether or not you have an accountable plan within your policies and procedures manual and whether or not your contract with your subcontractors address this. One likes to think that everyone is honest when filing their taxes.  However, I have seen cases when the subcontractor was reimbursed for expenses and still look the deductions for those expenses on their personal returns.

    As a general rule, I would not include reimbursed expenses in a 1099, but I would have a document signed by the contractor and a written policies and procedures to address this issue.

    Unfortunately for many honest business owners, the IRS is making 1099s a hot and heavy issue.  Should you ever be audited, if you have the documentation in place your position for not including reimbursed expenses on a 1099 is supported.

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