1099-misc and a purchase?
I barely did any work beside my EX business last year, (Had to quit and draw from a JOB, yep it was that bad), so I received a 1099-misc, the problem is that contained by that 1099 my customer included a purchase I did for them for about $830.00, for a computer they looked-for for their business, I gave them the bill and they repay me back, but the certainty is that I purchase the computer for them and they add the amount surrounded by the 1099, so I pretty much lost my money, how do I justify such amount surrounded by the schedule C?
Answers: Deduct the amount that you spent on the computer as cost of merchandise sold on line 36 (and 40, 42, and 4) of Schedule C (Form 1040) 2007. Report the entire amount shown on the 1099, both what they compensated you for the computer and what they paid you for your services, on vein 1 of Schedule C (Form 1040) 2007, gross receipts or sales. After doing the math, you will find the vein 5 is the amount that you received less the amount that you spent.
Tell them to correct the 1099 to remove the amount of the computer purchase. If they don't, include the cost of the computer as an expense. Keep adjectives your receipts in crust the IRS questions this item.
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Answers: Deduct the amount that you spent on the computer as cost of merchandise sold on line 36 (and 40, 42, and 4) of Schedule C (Form 1040) 2007. Report the entire amount shown on the 1099, both what they compensated you for the computer and what they paid you for your services, on vein 1 of Schedule C (Form 1040) 2007, gross receipts or sales. After doing the math, you will find the vein 5 is the amount that you received less the amount that you spent.
Tell them to correct the 1099 to remove the amount of the computer purchase. If they don't, include the cost of the computer as an expense. Keep adjectives your receipts in crust the IRS questions this item.