I just got an email from Stericycle that they are sending out corrected 1099 that remove the reimbursement amount from their initial 1099.

I just got an email from Stericycle that they are sending out corrected 1099 that remove the reimbursement amount from their initial 1099. There has been some discussion about whether reimbursements constitute income. It's good to see a major MSC recognizing that reimbursements do NOT constituent income.

Good Afternoon xxx ,
You are receiving this email because you will soon be receiving an updated 1099 in the mail. The initial 1099 that was emailed to you incorrectly included reimbursement amounts that should not have been Included as income.

Edited 1 time(s). Last edit at 03/06/2015 05:27PM by PA Shopper.

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More About Reimbursements

Nobody has ever said reimbursement should be considered income. The brouhaha seemed to be over the best way to deduct reimbursement on the tax return.

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That has been an issue for them since the Tylenol recalls years ago.
They never get it correct.

Huh? What do the Tylenol recalls have to do with 1099s?

Time to build a bigger bridge.

You never did the Tylenol recalls did you? They did them and it was a HUGE money outlay. They have been adding reimbursement for product purchase since way back then.

@dspeakes wrote:

Huh? What do the Tylenol recalls have to do with 1099s?

I thought we have one Stericycle for mystery shopping that's the former CORI and another that used to be RSI or RMI or something similar and does the recalls. I'm assuming the change in the 1099s is the former CORI since I haven't worked for them in over a year and didn't get an email.

If you're talking about the Tylenol poisoning recalls, that was so long ago I don't even remember how old I was at the time. Is that how they managed them? Hired contractors to go buy the product to get it out of the stores? I've worked retail grocery (headquarters, not store level, involved in warehousing and buying and accounting at different times) for 23 years (1973-1997) and recalls were always sent back to the warehouse for return to the company or collected by the sales people at store level.

Hmmm.... Never really thought about it but those sales people could have been contractors who do part time merchandising work. But I wouldn't think they would be paying out of their own pockets to get their hands on it. Usually they just issued credit memos. That would be a huge outlay of money. Maybe the recall procedures I dealt with grew out of the learning experience of the Tylenol recall situation.

Time to build a bigger bridge.

I've never been directly involved in one but have heard of recalls on a much smaller scale and ICs were used to pick up the product. I was under the impression it was being done "quietly." Wink, wink, nudge, nudge.

Tylenol and Peanut butter both were the same. Money reimbursed. That reimbursement was always on the 1099 and we were responsible for making sure our accounts knew which was which. There is a place on the web site always has been where you can sort it out but it takes time on our parts.

@CANADAMOMMY wrote:

Tylenol and Peanut butter both were the same. Money reimbursed. That reimbursement was always on the 1099 and we were responsible for making sure our accounts knew which was which. There is a place on the web site always has been where you can sort it out but it takes time on our parts.

What's the difference between this or the many MSC's that pay a flat-rate amount per assignment such as Goodwin, Ardent Services, etc.?

Either way, you should be tracking your own expenses and net profits in the first place. Not sure why this should be seen as an issue...

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

The issue is that reimbursements are not income. MSC that report reimbursements as income on a 1099 are reporting your income on an inflated and incorrect number to the IRS - that's the issue. A 1099 should only report income. It's nice to see an MSC recognize their error and offer a corrected 1099.

and if your own numbers conflict with what the MSC reports to the IRS...then you are likely in for an audit....and the IRS agent making up their own rules as they go along to try to get money you don't owe..

for example--i worked with toddlers....i deducted an expense of a Dora the Explorer book...the IRS agent claimed it coudln't be deducted as i bought it for my personal use..WT&..did they think it was my bathroom reading.....
i had to justify many deductions that they tried claiming coudln't possibly be a deduction...i hope none of them were parents...maybe they had their kids reading teh IRS codes instead of Winnie the Pooh!

PAShopper, have you found anywhere on this forum that someone said reimbursements are income? Most of us deal with dozens of MSCs every year. We have any number of issues including some who report all money paid to us on 1099s and others who pay a flat fee yet require a reimbursement. I've read your posts stating the MSCs are wrong and, in all honesty, I realize they are wrong. Sure it's great one decided to correct their forms, one, just one. Regardless of how the MSC does it, we have to find a way to make it right so we aren't paying taxes on "income" that actually went for a purchase required for our shop, reimbursed or not. You also tell people they are filling out tax returns wrong, but if you offered a better solution I missed it.

That's pretty much the point jmitw. There is no sense in giving the IRS an inflated income number.

Lisa - I had discussed how to deducted any reimbursements in another thread. If an MSC adds the reimbursements, just deducted them as other expenses in line 27 on schedule C and note the detail on line 48.

The ideal is to press MSC's that improperly report income and try to get them to change. Offering an example of one of the largest MSC changing their 1099 reporting is a good example to show those that are reporting improper amounts.

Why do I care? As long as the amount I pay taxes on is correct what is the big deal?

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And you save the time beating your head against a wall, sorry, trying to get MSCs to reissue a 1099.

Did anyone else get the email from them stating that they
screwed up the 1099's and they numbers provided were
incorrect. They need to send out new ones now.

Worse to me is they knew about the problem earlier but didn't
alert anyone because they wanted to get the accurate numbers first.

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When you try to please everybody, you end up pleasing nobody

Why do you want a MSC to report higher income to the IRS?

Because its wrong for one and jmitw's post gives you the real world implications.

there is a thread on this in another section....

i think the old ones would still work if you listed the income, but deducted the expenses..

it sounds like with the new 1099 you just list actual income and ignore deductions altogether..

someone commented that you should have your own records anyway to use..the problem with that is that it y send uo a red flag if your numbers don't match the 1099..

but if you reported the 1099 amount of cash income plus expenses paid and then reported deductions from actual icome for the expenses, wouldn't you come out with the same amount...and being paying the same taxes as you would if only actual cash income was reported..and getting any of the same credits?

it would only be fraudulent if you over reported actual cash income to get credits like the Earned income tax credit.....but by deducting the payment for expense..you are still only reporting your actual cash income.

can a 1099 differentiate between income and expenses? or is it always one lump sum..and up to you to differentiate.

Here's what I don't get about the 1099 discrepancies causing a red flag. How many companies do you work with and how many even send 1099s? Even if a 1099 is wrong, if you have $10,000 in 1099s and another $10,000 from companies where you didn't earn enough to generate one, you will still be reporting $20,000, quite a bit more than the total of the 1099s.

I received quite a few 1099s but I always go by my own very detailed records.

1099's only cause a red flag if you report less than the income that is reported on them.
So if you received 10,000 in 1099's and only saying you received 5,000...that will cause
a red flag. If you report 15,000 in income and 10,000 was 1099's...it doesnt matter.

An msc should only report money you received by 12/31. I've heard some msc's report
money earned in Dec but isn't paid til Janauary. So that may cause a flag if you report
less if you do your own number tracking but you just tell them you are reporting it the
year received and that is it.

Also I received a notice with one of my 1099's from an msc saying starting this year
they are including all reimbursement amounts in the 1099 total and it's our responsibility
to separate it out. Wonder what is making them change it.

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I just got an email from Stericycle that they are sending out corrected 1099 that remove the reimbursement amount from their initial 1099.

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