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

Discussion in 'Off-Topic' started by kchacker, May 15, 2019 at 10:51 AM.

  1. kchacker

    kchacker Active Member

    Mar 1, 2012
    972
    187
    43
    Phoenix
    Ratings:
    +733 / 24 / -1
    #1 kchacker, May 15, 2019 at 10:51 AM
    Last edited: May 15, 2019 at 12:35 PM
    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?
     
  2. Sparkplug

    Sparkplug Well-Known Member
    SuperFanatic

    Oct 9, 2008
    1,852
    242
    63
    Farmer
    Central Iowa
    Ratings:
    +820 / 23 / -0
    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
     
    • Agree Agree x 1
  3. IcSyU

    IcSyU Well-Known Member

    Nov 27, 2007
    26,259
    1,271
    113
    Rochester, MN
    Ratings:
    +3,065 / 247 / -3
    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.
     
  4. capitalcityguy

    capitalcityguy Well-Known Member

    Jun 14, 2007
    7,811
    425
    83
    Male
    Des Moines
    Ratings:
    +1,388 / 147 / -0
    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).
     
    • Agree Agree x 1
  5. dosry5

    dosry5 Well-Known Member

    Nov 28, 2006
    5,064
    567
    113
    Johnston
    Ratings:
    +1,804 / 64 / -4
    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.
     
    • Winner Winner x 1
  6. Sparkplug

    Sparkplug Well-Known Member
    SuperFanatic

    Oct 9, 2008
    1,852
    242
    63
    Farmer
    Central Iowa
    Ratings:
    +820 / 23 / -0
    Question- Is the OP submitting receipts for items/expenses being reimbursed?
     
  7. ArgentCy

    ArgentCy Well-Known Member
    SuperFanatic

    Jan 13, 2010
    16,787
    1,113
    113
    Male
    Ratings:
    +10,707 / 1,819 / -741
    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.
     
    • Agree Agree x 1
  8. pulse

    pulse Well-Known Member

    Mar 24, 2006
    7,140
    350
    83
    Ratings:
    +1,057 / 31 / -0
    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.
     
    • Like Like x 1
  9. kchacker

    kchacker Active Member

    Mar 1, 2012
    972
    187
    43
    Phoenix
    Ratings:
    +733 / 24 / -1
    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.
     
  10. kchacker

    kchacker Active Member

    Mar 1, 2012
    972
    187
    43
    Phoenix
    Ratings:
    +733 / 24 / -1
    Yes.
     
  11. kchacker

    kchacker Active Member

    Mar 1, 2012
    972
    187
    43
    Phoenix
    Ratings:
    +733 / 24 / -1
    This is correct. I am currently working for three different companies and trying to hook up with a fourth.
     
    • Like Like x 1
  12. kchacker

    kchacker Active Member

    Mar 1, 2012
    972
    187
    43
    Phoenix
    Ratings:
    +733 / 24 / -1
    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.
     
  13. Ms3r4ISU

    Ms3r4ISU Well-Known Member

    May 7, 2008
    4,572
    351
    83
    Communication specialist
    Ames
    Ratings:
    +957 / 9 / -0
    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.
     
  14. SCNCY

    SCNCY Well-Known Member

    Sep 11, 2009
    3,099
    231
    63
    La Fox, IL
    Ratings:
    +1,108 / 54 / -0
    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.
     
  15. kchacker

    kchacker Active Member

    Mar 1, 2012
    972
    187
    43
    Phoenix
    Ratings:
    +733 / 24 / -1
    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.
     
  16. Urbandale2013

    Urbandale2013 Active Member

    Jan 28, 2018
    393
    65
    28
    Male
    Accountant
    Urbandale
    Ratings:
    +578 / 81 / -2
    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.
     
    • Like Like x 1
  17. oldman

    oldman Well-Known Member

    Nov 5, 2009
    7,676
    1,252
    113
    Ratings:
    +2,993 / 37 / -0
    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.
     
  18. keepngoal

    keepngoal Jobless Jerk
    Staff Member Bookie SuperFanatic

    Jun 20, 2006
    27,417
    1,786
    113
    Ratings:
    +6,125 / 159 / -3
    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.
     
  19. isufbcurt

    isufbcurt Well-Known Member

    Apr 21, 2006
    14,632
    2,881
    113
    Male
    CPA
    Newton
    Ratings:
    +13,773 / 615 / -5
    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.
     
    • Like Like x 1
    • Agree Agree x 1
  20. cmjh10

    cmjh10 Well-Known Member

    Dec 5, 2012
    16,935
    1,602
    113
    Iowa Falls
    Ratings:
    +5,529 / 328 / -2
    You dawg you
     

Share This Page