Self employed or 1099 folks - reasonable to ask for separate check?

[mywayorcyway]

I've recently started working as a full-time 1099 contractor for a few different business (hated my full time job and quit). There are times when I have to pay for things that are reimbursed by the company I'm working for - software, flights, etc.

When submitting an invoice, I'll submit my billable hours separately from my expenses. They've been cutting me checks with the amounts combined, which makes taxes a bit of a hassle.

Is it reasonable for me to request separate checks for these two things, even if the expenses checks may be small?

 

[Sparkplug]

I don’t think it is unreasonable. Are you submitting two invoices or just dividing it up on one? If one try two. Double check your 1099’s when you receive them to make sure they are not including the expenses

 

[IcSyU]

I don't see an issue with the reimbursed expenses being included on the 1099.

Whether you claim revenue of $120,000 and $20,000 of reimbursement expenses or $100,000 of revenue it's the same thing for tax purposes.

Now for insurance purposes things may be different if premiums are based on revenues.

 

[capitalcityguy]

This is not an area of expertise at all for me, but a couple things the OP stated seemed odd.

I thought if you were paid 1099 compensation, you were NOT an "employee".

Likewise, I'm surprised any expenses are reimbursed. I thought contract work like this being paid via 1099 was really no different than being self-employed where all expense are on you (but you do get to write them off against you income).

 

[dosry5]

This is not an area of expertise at all for me, but a couple things the OP stated seemed odd.

I thought if you were paid 1099 compensation, you were NOT an "employee".

Likewise, I'm surprised any expenses are reimbursed. I thought contract work like this being paid via 1099 was really no different than being self-employed where all expense are on you (but you do get to write them off against you income).

You’re correct. If you’re getting expenses reimbursed and and working essentially full time for a company, the IRS likely would classify you as an employee. Lots of company’s cheat the system by trying to call an employee a contractor.

 

[Sparkplug]

Question- Is the OP submitting receipts for items/expenses being reimbursed?

 

[ArgentCy]

Just saw a contractor go through this and they got hit big time by the IRS I think. Our accountants always steered us away from having 1099 employees.

 

[pulse]

I’m not an accountant, but he said he’s working for different businesses, not “full time” for one. So I don’t think the IRS would look at him as a full time employee to a company since he has multiple customers.

 

[mywayorcyway]

This is not an area of expertise at all for me, but a couple things the OP stated seemed odd.

I thought if you were paid 1099 compensation, you were NOT an "employee".

Likewise, I'm surprised any expenses are reimbursed. I thought contract work like this being paid via 1099 was really no different than being self-employed where all expense are on you (but you do get to write them off against you income).

I edited my original post. I am not an employee, I receive no benefits from these companies other than a check.

I have plenty of expenses that are solely my responsibility, and I'm tracking them as such. I have to maintain my own office, my internet, my phone, my equipment, etc. I am not reimbursed for any of those things.

Other things are on them - when they say "hey, fly to Minnesota and take care of this for us", they reimburse me for it. Software I purchase and install on their servers for their sole use, a piece of hardware they need, whatever. My question is, is it reasonable to ask them for a separate check for my billable hours and my expense reimbursement.

 

[mywayorcyway]

Question- Is the OP submitting receipts for items/expenses being reimbursed?

Yes.

 

[mywayorcyway]

I’m not an accountant, but he said he’s working for different businesses, not “full time” for one. So I don’t think the IRS would look at him as a full time employee to a company since he has multiple customers.

This is correct. I am currently working for three different companies and trying to hook up with a fourth.

 

[mywayorcyway]

I don't see an issue with the reimbursed expenses being included on the 1099.

Whether you claim revenue of $120,000 and $20,000 of reimbursement expenses or $100,000 of revenue it's the same thing for tax purposes.

Now for insurance purposes things may be different if premiums are based on revenues.

This is true. I'm simply talking from a "keeping it organized" point of view. I'd rather have the $100,000 of revenue come on one set of checks, and the $20,000 on another.

 

[Ms3r4ISU]

No expert here either, but if you submit itemized invoices/bills with a specifically numbered/identified invoice, and the total matches the total of the check you get (with that invoice identification on it) I would think you have sufficient documentation to show income and expenses for tax purposes.

Of course, you can always make that a term of doing business with an entity -- that you will submit separate invoices and will be paid with separate checks.

 

[SCNCY]

I don't think it is unreasonable for them to separate your payments, so long that you have invoices for each. For example, if in this month you bill them for your service, and a separate invoice for costs (travel, lodging, etc.), then you could request different checks. If you only provide one invoice with services and costs included, I would only expect one check.

The first company I worked for, they would pay our vendors twice a week, I think Wednesday and Friday. As a result, any invoice that was due during that time got lumped into one payment with information stating which vendor invoices the payment covered. So it was the vendor's responsibility to do the proper accounting from the payment.

 

[mywayorcyway]

I don't think it is unreasonable for them to separate your payments, so long that you have invoices for each. For example, if in this month you bill them for your service, and a separate invoice for costs (travel, lodging, etc.), then you could request different checks. If you only provide one invoice with services and costs included, I would only expect one check.

That's the basic question - I do submit them separately. If it's reasonable for me to ask them to send separate payments, that is what I would prefer. What I don't know is if this is uncommon or if this creates additional headaches on their side.

 

[Urbandale2013]

I don’t think it is unreasonable to ask but I don’t know that it will be done. For example we pay both on one check but it is split out on the stub.

 

[oldman]

That's the basic question - I do submit them separately. If it's reasonable for me to ask them to send separate payments, that is what I would prefer. What I don't know is if this is uncommon or if this creates additional headaches on their side.

It will add to their accounts payable person's work, but I would think it is reasonable to ask -- at least have a conversation about.

 

[keepngoal]

It is not uncommon for contractors to have their clients pay for expenses (hotel, flight), really is a normal thing.

As for one check .. it is really on how you track it. If you use software "split" the record up into the appropriate categories where the total of those match the amount on the check. Your billing to the client would have these broken out too, correct?

So it really isn't an issue... I am happy to have a more in-depth convo if that is needed.

 

[isufbcurt]

I've recently started working as a full-time 1099 contractor for a few different business (hated my full time job and quit). There are times when I have to pay for things that are reimbursed by the company I'm working for - software, flights, etc.

When submitting an invoice, I'll submit my billable hours separately from my expenses. They've been cutting me checks with the amounts combined, which makes taxes a bit of a hassle.

Is it reasonable for me to request separate checks for these two things, even if the expenses checks may be small?

Just out of curiousity why does it matter?

In the end everything should workout to the same amount. If they are including the items you bought which they are reimbursing you for you just have to keep track of those items and claim them as expenses to offset the reimbursement amount for taxes. So in the end it'll all come out to the same amount anyways.

 

[cmjh10]

This is correct. I am currently working for three different companies and trying to hook up with a fourth.

You dawg you