Last year (06) I participated in a medical research study for which I was reimbursed for time and travel.?

Yesterday (02/02/07) they sent me a 1099-misc for 700.00. How can I dispute this with them, or the IRS? Is there a form? Is it too late? I would assume they have already sent a copy to the IRS.

Last year (06) I participated in a medical research study for which I was reimbursed for time and travel.?
The monies that your were paid are taxable income, but how you report it varies depending on what box this is reported in. If it is reported in box 3 then it would be reported as Other Income on line 21 of the 1040. If it is reported in any other box you need to read the instructions on the back of the 1099-misc for the box in question. Unless you are making participation your Trade or Business, then you would have to claim it as Self employment income and complete the Schedule C-ez as stated above.


http://www.irs.gov/pub/irs-pdf/f1099msc....


If you have further questions call the Internal Revenue Service at


1-800-829-1040
Reply:The best way to do this without having to fight anyone is to file along with your 1040, a Schedule C (Self-Employed Income). Put the amount that is on the 1099-MISC as gross income and then put how much you actually paid in travel on the line that says travel expense. It should end up being a wash meaning they gave you 700 and you paid 700. You will not be taxed but it will still be reported.





When you fill out the Schedule C on the line that says principal business activity just put "Reimbursed Expenses" and where it says Business Code put "999999" which means unable to classify. I've had to do this before and the IRS hasnt questioned me.
Reply:it's income.. pay your taxes
Reply:It's taxable income. You can't dispute it!





You can deduct legitimate business (such as travel, meals %26amp; lodging) expenses from it on Schedule C but the net amount is taxable for both income taxes and self-employment taxes. File Schedule SE to calculate the the SE tax, currently 15.3% on the net profit.





Tip: If you claim the whole $700 as travel expense, be prepared to prove it! A mileage log kept at the time as well as receipts for any fares will be needed to justify the deduction. If you "wash" it as another poster suggested it's likely that the IRS will ask for proof. If it's legit, go for it, but don't try to scam it.
Reply:The problem is that what they paid you is considered income. You cant deduct the mileage unless it was for a charitable cause. They have reported the $700 to the IRS and you need to include the amount on your return and pay taxes. If you have some money you can open a tax deductible IRA and make a contribution, then deduct it from your taxes to offset the extra income. You have until APril 17, 2007 to do that. Otherwise, you have to claim the money and pay tax on it. Good luck.