Do I only report income (vs. expense reimbursement) on 1099 forms? Or do I report ALL the money paid to a non-employee in excess of $600? If so, where do you report the compensation vs. expense reimbursement?

ANSWER

Expert Cory Bunger's Answer:

You should report all money paid to a nonemployee (income and expense reimbursements) in excess of $600 in Box 7 (Nonemployee Compensation) of the 1099-MISC.  You do not need to distinguish between income and expense reimbursements on the 1099-MISC.  However, you might consider providing a separate statement to the nonemployee showing a breakdown of the total.  Doing so will make it easier for the nonemployee to prepare his/her personal taxes, and it will minimize questions you receive regarding the amount reported on the 1099. 

Cory Bunger, CPA

North Carolina

17 yrs experience

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