How to Report CME Reimbursement

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southerndoc
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How to Report CME Reimbursement

Post by southerndoc » Mon Feb 11, 2019 10:01 am

I'm an independent contractor who receives a CME allowance each year from the health system where I practice. I am an independent contractor for a contract management group and not for the health system.

Last year, I received an $800 reimbursement for books I ordered from Amazon.com. Today I received $2600 to reimburse me for society dues, journals, etc. which were purchased in 2018.

How do I report this on taxes since I was told I will not receive a 1099-MISC for this.

1. For the $800, do I claim the business deduction for books and then report the income as personal miscellaneous not reported income in TurboTax? This would all apply to 2018.

2. For the $2600, do I claim the business deductions for membership dues/books (as allowed after political contribution reductions in societies) and then report in 2019 the income? I think I remember something in TurboTax where it asked me if I was reimbursed in 2018 for 2017 expenses. This may actually be beneficial to me since my income will be less next year.

3. Do I even need to report the reimbursement (i.e., don't deduct it and don't report the reimbursement)?

Thanks!

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southerndoc
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Re: How to Report CME Reimbursement

Post by southerndoc » Fri Feb 15, 2019 5:23 pm

I'm hoping someone might have some guidance here. :)

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unclescrooge
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Re: How to Report CME Reimbursement

Post by unclescrooge » Fri Feb 15, 2019 11:32 pm

Probably nowhere. But then again, IANACPA.

Iridium
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Re: How to Report CME Reimbursement

Post by Iridium » Fri Feb 15, 2019 11:56 pm

I would think you would report it as business income, but then turn around and deduct it as business expenses (I am assuming you actually spent the allowance in CME).

Details on what can be deducted is here: https://www.irs.gov/publications/p535

Note the sections on 'Club dues and membership fees' and 'Education expenses'.

The stuff required for CME and professional society dues should definitely count. Less sure about the books and journals.

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southerndoc
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Re: How to Report CME Reimbursement

Post by southerndoc » Sat Feb 16, 2019 12:21 am

Journals are for continuing education and the books are for board-recertification preparation.

Journals are almost always part of society memberships.

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dodecahedron
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Re: How to Report CME Reimbursement

Post by dodecahedron » Sat Feb 16, 2019 12:41 am

Since you are self-employed, if the professional society memberships, books, journals are ¨ordinary and necessary¨ business expenses in your line of work (your ¨trade or business¨ as the IRS describes it), then they should be deductible as Schedule C expenses. If the books are expensive and have a useful life of more than one year, they should arguably be depreciated over more than one year, but see here for discussion of Section 179 options to do a one year write-off.

The above is true whether or not you are getting reimbursed, but if you are getting reimbursed, you should of course declare the reimbursement as revenue on your Schedule C.

Edited to add: there is the issue of the timing mismatch (expenses incurred a year prior to reimbursement.) If your business accounting is on a cash rather than accrual basis, I think you can properly deduct the expenses in the year in which you paid them and declare the reimbursement in the year in which you received it.

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