Taxes JITB shops

To get right to the point I have a question on taxes for these Jack In the Box shops. I did so many last year that I received a 1099. So here is my question: on what amount would I pay taxes on in the following scenario: Say the fee is $20. My cost for the burger is $8. Yet when I get paid I get the $20 which includes reimbursement for the $8 I put out to buy the burger. So do I pay taxes on the entire $20 or just $12? Thank you.

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Declare the $20 as income, but also declare $8 as business expenses, so you are being taxed on $12.

Hard work builds character and homework is good for your soul.

Clamchatter, the above info is the way I do it too. But just be aware that had your "earnings" been $599 for the year they would not have sent you a 1099 but you still would have had to report that $599 on your taxes using the same method.
To make things easier I have two columns on my spreadsheet for deductible expenses for individual jobs. One column is for straight reimbursed expenses and the other column I call reimbursable expenses out of flat fees.

Edited 1 time(s). Last edit at 03/04/2020 09:29PM by sandyf.

Clamchatter,
What sandyf has described, or a similar method, will be very valuable to you in future. Having a record of the split between business expense (th price you paid for the food, in this case) and the fee portion of a lump sum/combo payment, of EACH payment, is the way to accumulate that the IRS could demand: "contemporaneous records" of expenses incurred in earning fees when the MSC pays a lump sum per shop.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.

You can also deduct certain expenses for your "business" including milage (the big one) and other expenses based on what the IRS allows. You should probably consult a tax expert to see what you can deduct...

Thank you all.

@Clamchatter wrote:

To get right to the point I have a question on taxes for these Jack In the Box shops. I did so many last year that I received a 1099. So here is my question: on what amount would I pay taxes on in the following scenario: Say the fee is $20. My cost for the burger is $8. Yet when I get paid I get the $20 which includes reimbursement for the $8 I put out to buy the burger. So do I pay taxes on the entire $20 or just $12? Thank you.

Revenue - Expenses = Taxable Income

$20 Fee - $8 Shop Expenses = $12 Taxable Income

Shopping the Greater Denver Area, Colorado Springs and in-between in Colorado. 33 year old male and willing to travel!

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Taxes JITB shops

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