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Old 06-01-2014, 09:30 AM
 
677 posts, read 843,480 times
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I know this isn't quite a retirement question, but I read this forum all the time and have learned so much over the past year. As some of you might remember, my husband was laid off from his job several months ago. They hired him back as an independent contractor for a 2 week job overseas. (he had been working on this project prior to being laid off). The company is reporting expenses (such as hotel, taxi, per-diem, etc) as income. How & where does this get declared that it ISN'T income?
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Old 06-01-2014, 09:44 AM
 
Location: Rosa’s Cantina
177 posts, read 194,875 times
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The Work and Employment forum might be a good place to post this as well. We use independent contractors in my office on a limited basis. We tell them "this is the job and this is what we will pay you to do it". They get a 1099 from us showing that as income. If they incurred expenses to do the job they would have factored that into their decision to take it and could then offset the income on their taxes by deducting those expenses. Good luck.
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Old 06-01-2014, 09:59 AM
 
Location: OH>IL>CO>CT
5,256 posts, read 8,442,829 times
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A possibly better forum would be the "Work and Employment" forum at
http://www.city-data.com/forum/work-employment/

Also may want to add some details, such as: who paid the expenses initially, will he being receiving an IRS 1099 form with these amounts included, did he have to provide receipts for expenses, did he get re-imbursement checks for these amounts.
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Old 06-01-2014, 10:05 AM
 
Location: Rosa’s Cantina
177 posts, read 194,875 times
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Quote:
Originally Posted by reed303 View Post
A possibly better forum would be the "Work and Employment" forum at
http://www.city-data.com/forum/work-employment/

Also may want to add some details, such as: who paid the expenses initially, will he being receiving an IRS 1099 form with these amounts included, did he have to provide receipts for expenses, did he get re-imbursement checks for these amounts.
Very helpful. I should have added we do reimburse some expenses and that amount is not included on the 1099 as income.
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Old 06-01-2014, 12:25 PM
 
Location: Florida
4,380 posts, read 3,722,412 times
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Quote:
Originally Posted by saralvr View Post
I know this isn't quite a retirement question, but I read this forum all the time and have learned so much over the past year. As some of you might remember, my husband was laid off from his job several months ago. They hired him back as an independent contractor for a 2 week job overseas. (he had been working on this project prior to being laid off). The company is reporting expenses (such as hotel, taxi, per-diem, etc) as income. How & where does this get declared that it ISN'T income?
If the company does not reconsider the 1099 reporting you would deduct on sch C of your 1040. This is not a problem for you. Just keep your receipts. You also have to file form SE to pay your social security tax.
If you are not good at taxes you might want to use Turbo tax and the interview option. You can find free tax software at the IRS site and play with last years return to see if you want do do your own return this year.
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Old 06-01-2014, 02:48 PM
 
1,227 posts, read 1,263,463 times
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rjm is correct. The company is paying your husband as an independent contractor. Everything that they pay him is considered income and if the total amount of all remuneration is over $600 he will receive a 1099-misc. Your husband will then attach Schedule C and Schedule SE to your 2014 income tax return. On the Schedule C it will ask for the total amount of income reported on the 1099-misc. plus all other income earned as an independent contractor. It will then have him deduct various expenses such as travel, automobile, rent, interest, meals, entertainment, dues, etc. The expenses will be subtracted from the income and whatever is left will be taxed for medicare/social security (Form SE) and for Federal Income Tax, and if you live in a state with state income tax, you will pay State income tax on that too.

You should speak with a tax accountant to get help. If he earns enough money he may have to pay estimated income tax (on Form 1040-ES) throughout the year or face penalties.
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Old 06-01-2014, 02:58 PM
 
Location: Wisconsin
21,549 posts, read 44,115,619 times
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As others have said, he needs to report his income and expenses from this independent contractor activity on Schedule C of your 1040. Schedule C is a separate form, easily obtainable here:

Schedule C (Form 1040), Profit or Loss From Business

In effect, his fees/earnings and expense reimbursements are reported as income on the 1099 filed by the company. Your hubby then reports these 1099 numbers as income on Schedule C, and then deducts those same expenses from that income based on receipts he's submitted for reimbursement, plus any other expenses he might have incurred which were not reimbursed.
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Old 06-01-2014, 06:56 PM
 
677 posts, read 843,480 times
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Thank you all very, very much. We both really do appreciate your responses (and the link). This is all new to us. Just wish there were more of these jobs for him.
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Old 06-01-2014, 07:11 PM
 
12,973 posts, read 12,818,383 times
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Quote:
Originally Posted by saralvr View Post
Thank you all very, very much. We both really do appreciate your responses (and the link). This is all new to us. Just wish there were more of these jobs for him.
We are RE Agents and therefore independent contractors. We use H&R Block which straightens all that out reasonably simply.

If your hubby is skilled in some specialty field he may want to check on the net...there are often lots if independent contractor jobs around through various recruiters. One of my daughters does it for IT types.
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Old 06-02-2014, 03:42 PM
 
677 posts, read 843,480 times
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Thank you for that info. Will check it out.
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