The company that I worked for just decided to pay me under the 1099.
I have typically been a full time employee but as I moved, I remained as a consultant. The company did not change my contract and they did not change my hourly rate.

I was sent to India to train workers there and given an additional $1000 credit towards hotels, meals etc. Any extra funds the company said that they would reimburse me for.

I spent a little bit extra (around $200) and they added that to my income on the 1099.

Also, the company was generous in paying for a ticket to an event that I attended. The ticket was around $500, which they asked me to pay and they reimbursed. They also added that amount to my income on the 1099 form.

All together my income on the 1099 was $4919 with approximately 700 of it being not for hours worked.

I did not realize that I would be paying taxes for these ‘perks’ especially not for the food and hotels in India.
My question is weather this is the correct procedure on their behalf?

Thank you

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Originally Posted by zuzannakk

The company that I worked for just decided to pay me under the 1099.
I have typically been a full time employee but as I moved, I remained as a consultant. The company did not change my contract and they did not change my hourly rate.

I was sent to India to train workers there and given an additional $1000 credit towards hotels, meals ect. Any extra funds the company said that they would reimburse me for.

I spent a little bit extra (around $200) and they added that to my income on the 1099.

Also, the company was generous in paying for a ticket to an event that I attended. The ticket was around $500, which they asked me to pay and they reimbursed. They also added that amount to my income on the 1099 form.

All together my income on the 1099 was $4919 with approximately 700 of it being not for hours worked.

I did not realize that I would be paying taxes for these 'perks' especially not for the food and hotels in India.
My question is weather this is the correct procedure on their behalf?

Thank you

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The general rule for 1099 is that you pay tax for the amount your business (not necessarily business, could be individual) generated, any expenses incurred in order to get that income is deductable, therefore, the expenses are not included in your net income in 1040 Schedule C (Profit and Loss from Business)

Your company included all the amounts in your 1099, but when you fill out Schedule C, all the legitimate expenses, such as hotels, meals (50% deductible, you need to eat food even you are not on business), and train tickets, are reported as expense, and therefore, not included in net, and you are not paying taxes for those. For entertainment expenses for your own, they are indeed generous enough to reimburse you for that. I guess you won't mind just pay the tax, which is a small fraction of the price, for the show.

You need to have the invoice and proof for the expenses you deducted in case you are audited.

Agreed!