I have an accounting question. I do some work on a contract basis. They gave me a bonus. Can I classify that as office expense or contract labor and not get a 1099 on it (it was $500)? I feel that, technically, it was a gift and not part of my fee. I understand that they will give me a 1099 for the actual fee's I've billed them.
No. First, the IRS limit for business gifts is $25 to any one person. And second, the the IRS considers it income to you regardless of how you feel about it. Even if you were a real employee, they must include their holiday bonus (with the exception of the $25 gift)in their income and it's subject to taxes and withholdings and it appears on their W-2 form. Sorry.
