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Author Topic: NIH Review and Taxes  (Read 11723 times)
seththinks
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« on: February 21, 2012, 10:54:28 AM »

I've been searching the forums to determine how to handle taxes associated with income associated with travel reimbursements, honorariums and grant panels. The first is a $1500 dollar payment received from a school where I gave a lecture. The school was out of state and I had to arrange my own airfare and hotel. The rest of the money was mine to keep. They sent me a 1099-Misc showing $1500 dollars in expenses. I'm assuming I have to file this as self-employment? Can I deduct the travel expenses? Do I need receipts? 

My second question is in regards to the NIH.....  Not sure what sort of form they send. It's not a standard 1099-Misc, but it does show that they paid $850 dollars to cover some expenses associated with my travel and my time. How do I report NIH income for grant review? 
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prytania3
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« Reply #1 on: February 21, 2012, 3:38:25 PM »

1500-850=$650.

Those are your expenses that you can deduct. You can't deduct something that was paid for by another source for that purpose. You only need receipts if you get audited.
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pedanterast
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« Reply #2 on: February 21, 2012, 5:02:12 PM »

Prytania, you would do everyone a favor by not commenting on these tax questions because your answers are always wrong.

Yes, you need to file Schedule C and report the $1500.  What the university paid in expenses is totally irrelevant.  From the $1500 in gross income, you can deduct whatever expenses you paid for travel, lodging, etc.  So what you will pay tax on is the difference between the $1500 and your expenses.  You will have to pay income tax on it, and if the net amount is more than $400, self-employment tax as well.
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prytania3
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« Reply #3 on: February 21, 2012, 6:09:33 PM »

Prytania, you would do everyone a favor by not commenting on these tax questions because your answers are always wrong.

Yes, you need to file Schedule C and report the $1500.  What the university paid in expenses is totally irrelevant.  From the $1500 in gross income, you can deduct whatever expenses you paid for travel, lodging, etc.  So what you will pay tax on is the difference between the $1500 and your expenses.  You will have to pay income tax on it, and if the net amount is more than $400, self-employment tax as well.

And give up bugging you? No way.
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seththinks
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« Reply #4 on: February 22, 2012, 9:15:37 AM »

Thank you Pedanterast!  Any ideas about the NIH? I'm assuming it's the same deal. 

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pedanterast
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« Reply #5 on: February 22, 2012, 9:44:00 AM »

If the NIH did not pay the $850 to you, it is irrelevant to you.  The form is to prevent people from deducting expenses they did not pay or were reimbursed for.
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ragingsquirrel
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« Reply #6 on: February 22, 2012, 1:27:42 PM »

If you received over a certain amount (I think $600?) you should already have gotten a 1099 from NIH in the mail to your home address. It will list your honoraria and your per diem/travel reimbursement, both as income, but (I could be wrong, but this is what I've done) you are only required to list the honorarium part on your taxes.
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tee_bee
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« Reply #7 on: February 22, 2012, 4:01:42 PM »

FWIW, I get some modest book royalties, review payments from NSF (which are to cover hotels and the balance is our compensation), small honoraria, and so on. It all goes on schedule C, and I track my expenses. I think many research-active professors are likely into the Schedule C world.

Also, my wife, about ten years ago, got me to get a CPA tax preparer. That's been a godsend--it's $200 a year, but the cost of the serve is ... yes! .... tax deductable! So it's not free, but it saves me time, worry, and, even when I got into a bit of a disagreement with the IRS, it saved me well over $1500 (they were right about one thing, but wrong about another, so my net tax owed was only $150 instead of $1650!).

Some people enjoy doing their own taxes. I don't. Find a good tax preparer if you can.
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seththinks
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« Reply #8 on: February 23, 2012, 11:37:43 AM »

Thanks for the advice.....  Honestly, over the past few years my taxes have been so easy I just couldn't justify hiring an accountant. I'm at the beginning of my career and don't have much in the way of assets, etc.  Regardless, I assume each year will probably become a little more complex, so I guess it's a good time to start looking for help!

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tee_bee
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« Reply #9 on: March 02, 2012, 11:40:04 PM »

Thanks for the advice.....  Honestly, over the past few years my taxes have been so easy I just couldn't justify hiring an accountant. I'm at the beginning of my career and don't have much in the way of assets, etc.  Regardless, I assume each year will probably become a little more complex, so I guess it's a good time to start looking for help!



I was an assistant prof when I first used a CPA. He gave me some great advice--like buying an affordable house instead of renting--that did save me taxes and money in the long run. If nothing else, hire one for just one year, and then, if your taxes are pretty similar in following years (just NIH payments, for example) just follow what the CPA did in prior years.

I should have made clear that my wife got us a CPA because she is an artist, does a lot of work in theatre, and makes relatively little money, so every expense she can write off her taxes really does help. And since we're now married, everything she earns is taxed at the marginal rate, so it's good to get deductions. Perhaps our situation, then, really is more complex. The IRS and some community groups do free tax advice workshops in libraries and places like that, which may be worth looking into.
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rienzi
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« Reply #10 on: April 14, 2012, 11:19:36 AM »

I received my 1099 form from the NIH for 2011 that shows fees paid for my professional services (grant reviews) ($1000), as well as reimbursements for my per diem and transportation costs ($355). For the first time, however, the NIH "total compensation reported to the IRS" is the combined amount, hence, $1,355. I should not have to pay taxes on my reimbursements, yet this appears to be the case here. Anyone have an explanation?
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