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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29569
Experience:  Taxes, Immigration, Labor Relations
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I have a client that got w-2 income but also issued 2 1099's

Customer Question

I have a client that got w-2 income but also issued 2 1099's for $30,000.00 for work he had done for him. would you do a schedule C with a $30,000 loss?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

If that is the SAME work - there should not be 1099MISC reporting the same income.
Only W2 is correct reporting.
If that is a DIFFERENT work that is considered self-employment - then 1099MISC is correct - and that is reported on schedule C as self-employment income.
I am not clear where you determine the loss as either form reports income.
Please verify.

Customer: replied 1 year ago.
He basically paid two people to help him with the income he got from his w-2.
Customer: replied 1 year ago.
are you still there?
Expert:  Lev replied 1 year ago.

As an employee - the taxpayer is entitled to deduct his/her employee business expenses.
That includes payments to other persons.
However - as he was NOT involved into self-employment activity - it woudl not be correct to use schedule C.
As an employee, you may be able to deduct your work-related expenses as an itemized deduction (subject to limitations) on schedule A.
Generally, you must use Form 2106 or Form 2106-EZ to figure your deduction for employee business expenses and attach it to your Form 1040, U.S. Individual Income Tax Return. You then take the deductible expenses on Form 1040, Schedule A, as a miscellaneous itemized deduction subject to the 2% of adjusted gross income limit.