Employee Receives 1099

[ZoomnFinancial]

A client is a employee of a company and receives a W2 for his/her wages. They also receive a 1099 for "expenses" as the employee travels around doing shows for outdoor clients of his employer as part of the job. Expenses that come through 1099 are just expense $ and not directly reimbursing certain expenses.

Long story short... My client ends ended up having more income (from 1099) then expenses (even after home office as he works from home).

It's not really a business so I was thinking 1099 should be recorded as other income and expenses should be taken as unreimbursed...?

Any ideas?

Anyone else ready for the season to be over? It's only March 18th... Usually I don't look forward to the end until April!

[ILLMAS]

Just look at the extra amount paid as a bonus subject to SE tax. Also the reimbursed expenses should be expenses of the company, not of the employee.

[RitaB]

Just look at the extra amount paid as a bonus subject to SE tax. Also the reimbursed expenses should be expenses of the company, not of the employee.

The company is deducting the amount paid to the worker. If it had been an accountable plan, the worker would turn in receipts and get reimbursed, and there would be no 1099-Misc. In this case, the worker deducts the actual expenses. And, yes, the excess after expenses is like a bonus. Pay the SE tax and carry on.

[Abby Normal]

Employer doesn't know what they're doing. It belongs on the W2, but would be WAAAYY smarter for both employer and employee to have an accountable plan. Employer may be playing "hot potato" with the 50% limit on meals deduction... or they may just be stupid.