Should I claim airport parking expenses or just absorb the cost as an independent contractor?

This is a classic case of reimbursed expenses being improperly reported on your 1099-NEC. Here's what's happening: when the company reimburses you for the parking, they're correctly giving you back your money. However, they're incorrectly including those reimbursements on your 1099-NEC as if it were income. The good news is you can absolutely deduct these exact same expenses on your Schedule C. So on your tax return, you'll report the 1099-NEC amount (including the parking reimbursements) as income, but then deduct those same parking expenses as a business expense. This creates a wash - you're taxed on the reimbursement but get a deduction of the same amount. Don't stop getting reimbursed! That would be leaving your own money on the table. Instead, keep good records of all your parking receipts, report the full 1099-NEC amount as income, and deduct those same parking expenses on your Schedule C.

After years of dealing with the exact same frustrating issue with my 1099 work, I discovered taxr.ai (https://taxr.ai) and it completely changed how I handle these reimbursed expenses. I upload my 1099s and receipts, and their system automatically identifies these types of reimbursed business expenses and creates the proper documentation to show they shouldn't be taxed as income. What I really loved was how it analyzed my particular situation with the parking reimbursements showing up on my 1099-NEC and guided me through exactly how to report it properly. It even flagged that this was an incorrect reporting practice by my client and generated language I could use to address it with them for next year.

I was skeptical about taxr.ai at first but decided to give it a try with my contractor parking situation. I'm honestly surprised how well it worked. The system immediately flagged that my client was incorrectly including reimbursements on my 1099-NEC and walked me through exactly how to handle it. The receipt scanning feature saved me about 3 hours of manual data entry, and it organized everything perfectly for my Schedule C. It even generated a letter I could send to my client explaining why they shouldn't include reimbursements on my 1099 next year. My accountant was impressed with how thoroughly it documented everything, especially for potential audit protection. Definitely using this again next year.

If you're getting frustrated with the constant back-and-forth about these parking reimbursements, you might need to deal with the IRS directly to get clarity. I had a similar situation and spent WEEKS trying to get someone on the phone at the IRS. Then I found Claimyr (https://claimyr.com) and was honestly shocked when they got me connected to an actual IRS agent in about 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent confirmed exactly how to handle reimbursed expenses improperly reported on 1099s and provided documentation I could share with my client. Saved me a ton of stress and potentially an audit situation. I was thinking I'd never get through to a human at the IRS!

I need to eat my words about Claimyr. After posting that skeptical comment, I was still stuck trying to figure out how to handle my contractor parking expenses on my taxes, so I reluctantly gave it a try. I was absolutely shocked when I got connected to an actual IRS agent in about 15 minutes. The agent confirmed that reimbursed business expenses incorrectly included on a 1099-NEC should be reported as income but then deducted as business expenses on Schedule C. She even emailed me an IRS reference document explaining the proper procedure that I could show my client for next year. Would have taken me weeks to get this information otherwise. Can't believe I'm saying this, but totally worth it for tax situations like this where you need clear guidance straight from the IRS.

As an independent contractor who travels a lot, I just tell clients upfront that my fees INCLUDE travel expenses. Then I bundle everything into a single invoice with no itemization. I find this approach eliminates all these reimbursement headaches. The client pays one amount, issues one 1099 for services, and I claim my legitimate business expenses. No more chasing parking receipts or dealing with incorrectly issued 1099s for reimbursements.

Just wanted to say that this is why I hate being a contractor sometimes. Was dealing with virtually identical issue with parking at SFO for client visits. I ended up just using Uber/Lyft instead and expensing those directly. Worked out to roughly the same cost as airport parking for 3-4 day trips but much cleaner from a tax perspective since they're clearly business expenses.

This is exactly the kind of confusing contractor situation that makes tax season a nightmare! I've been dealing with similar reimbursement issues for years. What really helped me was getting everything documented properly - not just keeping receipts, but also creating a paper trail showing that these were legitimate business expenses being reimbursed, not additional income. One thing I learned the hard way: make sure you're consistent about how you handle these expenses year over year. The IRS doesn't like it when contractors flip-flop between claiming expenses as deductions versus treating reimbursements as income. Pick a method and stick with it. In your case, since they're already issuing the 1099-NEC with the reimbursements included, you're pretty much locked into reporting it as income and then deducting the expenses. Also, consider having a conversation with your client about setting up a proper accountable plan for next year. If they require you to submit receipts and reimburse exact amounts, those shouldn't be appearing on your 1099 at all. It might save both of you some headaches down the road.

I've been in this exact situation as a contractor and can confirm what others have said - you're essentially stuck reporting the reimbursements as income since they're on your 1099-NEC, but you can deduct the same amounts as business expenses on Schedule C. One thing I'd add is to make sure you're tracking the business purpose for each parking expense. The IRS wants to see that these were legitimate business travel expenses, so I keep a simple log with dates, client visits, and parking costs. It's also worth noting that if you're parking at the airport for business travel, that's generally considered a fully deductible business expense rather than just partial like commuting would be. The frustrating part is that your client should really be handling this differently - reimbursements for documented business expenses shouldn't be showing up on your 1099 at all. But changing their accounting practices mid-year is probably more hassle than it's worth. I'd definitely continue getting reimbursed rather than eating those costs yourself - just make sure you have solid documentation for the deductions.