@redpat wrote:Lol! This whole thing smells.
Also, everyone is forgetting that he has a charge from the same vendor that gave him income so he could technically net or expense that part because he technically didn't earn that income / refund of services. It went in and out......?????!!!!!!!
Gross sales is different than net income!
True, however the OP tax return begins with Gross Income as the default starting point. Justifying items to reduce that income should have a legitimate expense. It is a low risk that the OP tax return would be selected for audit, but as a 1099 recipient, with declaring expenses, that risk of audit is a bit more than a W-2 employee.
IRS agent: "Who did you pay this expense amount to?"
OP: "The same company that paid me most of my incoming 1099 revenue".
awkward pause...
G
@NRB525 wrote:
@redpat wrote:Lol! This whole thing smells.
Also, everyone is forgetting that he has a charge from the same vendor that gave him income so he could technically net or expense that part because he technically didn't earn that income / refund of services. It went in and out......?????!!!!!!!
Gross sales is different than net income!
True, however the OP tax return begins with Gross Income as the default starting point. Justifying items to reduce that income should have a legitimate expense. It is a low risk that the OP tax return would be selected for audit, but as a 1099 recipient, with declaring expenses, that risk of audit is a bit more than a W-2 employee.
IRS agent: "Who did you pay this expense amount to?"
OP: "The same company that paid me most of my incoming 1099 revenue".
awkward pause...
Didn't say expense Schdule C line under gross sales Returns and giveaways, that's where a refund would go from the same company that gave you a check. You gave it back to them but on your credit card. Services where never rendered. Returns and refunds happen all the time.
In addition, the whole transaction should not be put on a 1099 for accounting purposes because no services where transacted it could be put through a loan account or customer deposit account because it did go in and out of each of their accounts. The whole audit or accounting trail is the credit card and the check being paid back it's a wash. So showing whole transaction to an agent wouldn't be awkward at all.
Therefore for tax purposes there is nothing wrong with this transaction but from an ethical stand point there is.
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@rlx01 wrote:
If you can't spend $1,333 a month organically, perhaps the CSR isn't the right card for you?
As far as taxes, the way the OP describes this both he/she and the company would inflate their gross income by 4K.
What you would do instead is say:
4K charged by company on CC
4K *refunded* by company via check (not a commission -- a customer refund).
I have no idea why the company wants to do this though. Waste of time and money.
The whole thing is an incredibly bad idea. Why someone would want to get their employer mixed up in something like this is beyond me.
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Yeah. If my company did this I'm pretty sure our book keeper and accountant would fire us. 