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I'm looking for advice where to properly code travel expenses for an outside consultant.
We hired an outside consultant and the work he performs is coded to our professional fees/consultant account. He recently traveled out to our office for a face to face meeting. He paid for airfare, hotel, car rental and meals himself, then submitted an expense report for those charges, separate of his consulting invoices.
We have separate accounts for hotels, meals, airfare that we use to code our expenses to. The consultants travel expenses are not part of his hourly consulting fee, should these expenses be coded separately to hotel, car rental, meals, etc? Or lumped in to professional fees/consultant account? Thought process behind this?
Thank you in advance.
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This is a tricky question. You should probably code these costs to travel expenses. However, the dilemma is that if you do not include the costs as part of the consulting fee and include the amounts on the 1099 at year end, the consultant could double-dip and claim the expense without the reimbursed amount.
I say to code these costs to travel expenses and adjust your 1099 categories to include travel costs as nonemployee compensation. You consultant can then deal with this on his/her personal tax returns.
This is a tricky question. You should probably code these costs to travel expenses. However, the dilemma is that if you do not include the costs as part of the consulting fee and include the amounts on the 1099 at year end, the consultant could double-dip and claim the expense without the reimbursed amount.
I say to code these costs to travel expenses and adjust your 1099 categories to include travel costs as nonemployee compensation. You consultant can then deal with this on his/her personal tax returns.
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