Gift Cards and Taxes.....Question.....

If you do a Merchantile Shop and they pay you "Gift Card Only" and in that, you purchased your dinner, how does that wash, in the tax dept?

Dinner $14.00 (you paid)

Gift Card Reimbursement $40 Gift Card (they give you $40 GC for dinner, no matter how much you spend).

So, is the reported amount, minus the cost for dinner?

Or, do they report to IRS, all what they send you ?

Or, is all this a wash? Like when you buy a burger at 5 Guys and they reimburse you the burger?

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If this is one of those one-use cards, where if you don't spend the whole thing you forfeit the balance, then it's worth what you got out of it no matter what number was on the face of it. But I think I'd be squawking if the MSC put a $40 gift card on your 1099 and didn't let you get the benefit of the full $40. You should ask the MSC how they report those. Hopefully they discussed it with their tax attorney before deciding to pay people this way.

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I pray it does not occur that the last thing I did before I died was vacuum the house or eat broccoli.

I work for another company where I get a $40 gc no matter what but they are regular gc's the same you might get a friend for a gift with no expiration date. I was thinking of declaring the entire value minus what I actually spent on the shop but perhaps I should look at one of those sites that buy and sell gc and see what the value of it is on the open market. It is not the same as cash at all!!
good question. waiting to see the response on this one.

You have to ask the MSC how they report it. They may consider the full $40 as a purchase reimbursement and not report it at all on your 1099 which would allow them a bigger deduction and why they are using a gift card.

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Gift Cards and Taxes.....Question.....

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