Does mileage reimbursement need to be included on my 1099-NEC? Seems wrong!
I'm a part-time college instructor who recently attended a professional development conference. The organization paid me a $375 stipend for participating, which I understand is taxable income. However, I just received my 1099-NEC and they've included my $453 mileage reimbursement on it too (total showing $828). This doesn't seem right to me. The mileage was just covering my actual travel expenses - I drove about 820 miles round trip. I'm not making any profit on that reimbursement, it's just covering what I spent on gas and wear on my car. When I enter this full amount into my tax software, it's increasing my tax bill by nearly $250! That's almost wiping out the stipend I received in the first place. I only actually "made" $375 from this gig, so paying taxes on the entire $828 feels completely wrong. I'm in Oklahoma and using TurboTax. Is there something I can do about this? Can I somehow separate the stipend from the reimbursement when I file? Should I contact the organization to get a corrected 1099-NEC?
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Ella Thompson
You're right to question this! The mileage reimbursement should NOT be included on your 1099-NEC if it was paid under an accountable plan. An accountable plan means you: 1) Had a business reason for the expenses 2) Documented/substantiated your expenses to the payer within a reasonable time 3) Returned any excess reimbursement Your situation (attending a required conference and being reimbursed at the standard mileage rate) sounds like it meets these criteria. The organization made a common mistake by including both the stipend and the mileage reimbursement on the 1099-NEC. You have two options: Contact the organization and request a corrected 1099-NEC showing only the $375 stipend, OR report the full $828 on your Schedule C but then deduct the $453 as a business expense on the same form (which gives the same tax result).
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JacksonHarris
•What if the organization refuses to issue a corrected 1099? My employer did something similar and they basically told me to deal with it on my own tax return.
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Ella Thompson
•If they refuse to correct it, then definitely go with the second option. Report the full amount from the 1099-NEC on your Schedule C (line 1), but then also claim the exact same mileage as a business expense on line 24a. This will effectively cancel out the reimbursement portion, so you'll only be taxed on the stipend portion. Double-check that your software has created a Schedule C when you enter the 1099-NEC income, then make sure you enter your mileage expenses there as well. This is completely legitimate and is the proper way to handle it when the payer won't correct their mistake.
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Jeremiah Brown
Had almost this exact situation last year. I used https://taxr.ai to analyze my 1099-NEC and supporting documents, and they confirmed what the first commenter said - the organization shouldn't have included mileage reimbursement on the 1099-NEC if it was an accountable plan. I uploaded my expense records and the tool showed exactly how to report it on Schedule C. It really helped me understand what was going on and feel confident I was doing it right. I was super nervous about claiming business expenses since I'd heard that increases audit risk.
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Royal_GM_Mark
•How does this taxr thing work? Does it just give general advice or does it actually help with the specific paperwork and numbers? I've got a similar issue but with a 1099-MISC.
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Amelia Cartwright
•Is it really worth using a special tool for this? Seems like you could just enter the right numbers in TurboTax and be done with it. Unless you're dealing with thousands of dollars, seems like overkill.
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Jeremiah Brown
•It analyzes your specific tax documents and situations, not just general advice. You upload your 1099 and any supporting documentation (like expense records), and it gives you personalized guidance based on those exact documents and numbers. It'll tell you exactly which lines need to be filled on which forms. For situations like 1099-MISC vs 1099-NEC confusion or knowing which expenses are legitimate, it's super helpful. It's more about the confidence of knowing you're doing it right than just the math.
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Royal_GM_Mark
Just wanted to follow up! I tried that taxr.ai site someone recommended here and it was actually really helpful for my situation. I uploaded my 1099-MISC and my mileage log, and it clearly showed me that I needed to report the full amount but then deduct the mileage as a business expense. The tool even specified exactly which forms and line numbers to use, and explained why this approach was correct. Saved me a ton of stress wondering if I was doing it right!
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Chris King
FYI - if you have trouble getting the organization to correct the 1099, I had success calling the IRS directly using https://claimyr.com. I was on hold for HOURS trying to reach the IRS myself about an incorrect 1099, but with Claimyr I got through in about 10 minutes. The IRS agent confirmed I could report the total and deduct expenses on Schedule C, and even sent me some guidance docs. Check out how it works here: https://youtu.be/_kiP6q8DX5c
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Rachel Clark
•Wait, this actually works? I thought it was impossible to get the IRS on the phone these days. What's the catch? Do they charge a ton for this?
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Zachary Hughes
•Yeah right. No way some service can magically get through to the IRS when millions of people can't. I've literally tried calling dozens of times over weeks and can never get through. Sounds like a scam to me.
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Chris King
•No catch - it's a service that uses technology to constantly dial and navigate the IRS phone system for you. When they get through to a human, they call you and connect you directly to the agent. You don't have to sit there listening to hold music for hours. They do charge a fee, but I found it totally worth it because I was able to get clear guidance directly from the IRS in minutes instead of wasting an entire day on hold. For me, my time is worth more than the fee.
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Zachary Hughes
I have to eat my words. After seeing the recommendation here, I tried Claimyr because I was desperate to talk to someone at the IRS about my 1099 issues. It actually worked! Got a call back in about 15 minutes and was connected straight to an IRS rep. The agent confirmed exactly what others here said - I could report the full 1099 amount and then deduct the reimbursed expenses on Schedule C to get to the right taxable amount. Saved me hours of hold time and stress. Definitely skeptical about these things usually, but this one delivered.
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Mia Alvarez
You might also want to check if your employer was using the standard mileage rate (currently 65.5 cents per mile for 2023). If they reimbursed you at a lower rate, you can actually deduct the difference! So if they paid you 50 cents per mile but the IRS rate was 65.5, you can claim that extra 15.5 cents per mile as a deduction.
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Matthew Sanchez
•This is really helpful, I hadn't thought of that! They did reimburse me at 55 cents per mile, which is definitely lower than the current IRS rate. How exactly would I claim that difference? Would I just put the extra amount as a separate expense somewhere?
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Mia Alvarez
•You would calculate the difference and claim it as an unreimbursed employee business expense. So if you drove 820 miles and were reimbursed at 55 cents, but the IRS rate was 65.5 cents, that's a 10.5 cent difference per mile. Multiply 820 by 0.105 and you get $86.10 in additional deduction. Unfortunately, unreimbursed employee business expenses are no longer deductible for W-2 employees since the 2018 tax law changes. But since you're receiving a 1099-NEC, you're being treated as self-employed for this work, so you CAN still deduct it on Schedule C.
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Carter Holmes
I'm confused about something - if I'm getting a 1099-NEC, does that mean I have to pay self-employment tax on this money too? That's like an extra 15% on top of regular income tax, right?
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Sophia Long
•Yes, any income reported on a 1099-NEC is considered self-employment income, so you'll pay both income tax AND self-employment tax (which is about 15.3%). That's why it's extra important to make sure you're not paying those taxes on reimbursements you shouldn't be taxed on.
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Chloe Wilson
This is exactly why proper documentation is so crucial! For future reference, make sure you keep detailed records of your actual expenses (gas receipts, maintenance costs if using actual expense method, or a mileage log if using standard rate). Also, when working with organizations that reimburse expenses, try to clarify upfront whether they follow an accountable plan - this can save you headaches later. One thing to note: since you mentioned you're a part-time college instructor, if this was related to your regular teaching duties rather than independent contractor work, the classification might be worth reviewing too. But given that you received a 1099-NEC, you're being treated as an independent contractor for this conference work, which actually works in your favor for deducting expenses. The advice about using Schedule C to offset the reimbursement is spot on. Just make sure your mileage records are solid in case of any questions later!
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