USA 1099-MISC Question about refund

[TitanProperties]

I own a company that flips houses. I hire independent contractors to work on them. Upon completion, I hire a staging company to come in and furnish the entire house. I pay for 2 months of furniture rental up front. The last house I had sold in 1 month and I was refunded the pro-rated amount that I paid up front for the furniture rental. When I fill out the 1099-MISC for nonemployee compensation, do I write in the total amount I originally paid(2 months up front) or do I write in the total amount I paid less the refund?

Thanks!

 

[The Finance Writer]

You report gross amount originally paid on the 1099. It's up to the furniture rental business to deduct their refunds paid to you when reporting taxable income.

 

[kirby]

Timeout.
1099 is there so irs knows for sure how much INCOME the staging company earned. Because of the refund the staging company earned the NET amount not the gross amount paid. 1099 should be for the NET amount , unless Titan you really miss those staging guys and would like to hear from them again......

 

[TitanProperties]

Ok thank you for the replies

 

[The Finance Writer]

Form 1099-MISC is for reporting "payments", not "income." The IRS instructions do not appear to list an exception from reporting payment amounts that were subsequently reimbursed.

 

[kirby]

Gee, Poor ol' irs has titled the form "1099-MISC "Miscellaneous INCOME". Maybe we should tell them to fix that?

 

[The Finance Writer]

LOL, kirby. I don't think this is the first time the IRS instructions give a different meaning to the common understanding of a term, such as "income." My favorite is the Tax Code definition of a "qualifying relative", who doesn't even need to be related to you at all.