1099-MISC Question (1 Viewer)

[jrdbrn]

I told my parents I would file their taxes online for them and I am up to a point I've never dealt with before. My dad works for a company, but is paid by one of the owners. He is also given a fuel check every month, but it's given by the company itself. So he received a 1040 from his boss and a 1099 from the company.

Should he have been given a 1099-MISC at all for fuel reimbursement? He's basically given $5k a year to use his personal vehicle.

HRBlock is saying

You received a 1099-MISC because your employer considers you an independent contractor rather than an employee. Tell us about this income and any related expenses in:

if I put A full-time or part-time job.

These are my choices.

• A full-time or part-time job
• A 1-time or sporadic event
• A business you own or self-employment
• A farm you own
• A hobby

 

[gwballin]

If he's given 5k regardless of how much he drives for work it sounds like an unaccountable plan which is taxable income to your father. He should have been keeping track of his business miles to take a corresponding deduction on his return (either the standard mileage deduction or actual expenses).

 

[CajunSaint]

What do you mean his boss gave him a 1040?

Anyway, the simple answer is, he just needs to offset the 1099 with the mileage used for business or the actual expenses used...depending on which way he has it set up.

Net effect should be zero, unless he excess expenses against the income or the other way around, he pockets the money paid and doesnt use it for expenses(then he owes the taxes on it).

 

[gwballin]

What do you mean his boss gave him a 1040?

Given the context I figured it was a typo and he means W-2.

 

[Soundwave]

I have a feeling that that 1099-Misc (which he should get) will cost him a significant amount in taxes.

 

[jrdbrn]

I did mean W2. I'm all over the place right now.

I suggested taking it to a tax professional since I am unsure how to do this.

 

[gboudx]

If he wants to save a bit on the tax preparation, maybe you/he could try turbotax.com. You can go thru the entire process before you/he decide if you want to pay to file it.

 

[jrdbrn]

If he wants to save a bit on the tax preparation, maybe you/he could try turbotax.com. You can go thru the entire process before you/he decide if you want to pay to file it.

I did try. I don't know what to put for this

These are my choices.
A full-time or part-time job
A 1-time or sporadic event
A business you own or self-employment
A farm you own
A hobby

 

[gboudx]

I did try. I don't know what to put for this

These are my choices.
A full-time or part-time job
A 1-time or sporadic event
A business you own or self-employment
A farm you own
A hobby

Ah, I see. Yeah this is confusing. I don't follow where you said an owner pays him, but he's employed by the company. It sounds like he's employed by the owner and not the company. Just basing this on the W-2. A tax pro sounds like your best bet.

Turbotax does allow you to call a tax professional to help you.

 

[jrdbrn]

I don't know why he's employed by the owner, but he is. Last year, he received the 1099 from his boss, not the company. I don't know why they did it different this year.

 

[gwballin]

I did try. I don't know what to put for this

These are my choices.
A full-time or part-time job
A 1-time or sporadic event
A business you own or self-employment
A farm you own
A hobby

Pick 1-time or sporadic event, this should map the income to "other income" on page 1 of the 1040.

The corresponding deducitons will be on Sch A (depending on the details he may also have to file a Form 2106), ans an unreimbursed employee expense (which is subject to a 2% floor)