Stuart A. Bronstein wrote:
- quote -

Well, sad to say, it's right in the regulations under IRC
Sec. 62. Reg. Sec. 1.62-2(c) provides that if an employee's
business expenses are reimbursed under an "accountable
plan," the reimbursement is not included in the employee's
income. If they are reimbursed under a "nonaccountable
plan," the reimbursement must be included in the employee's
income, and the employee may deduct the expenses to the
extent they can be substantiated, but only as miscellaneous
itemized deductions (Form 2106) subject to the 2% AGI floor.

An accountable plan is defined as one that, among other
things, requires expenses to be substantiated to the
employer within a "reasonable time" (Reg. Sec.
1.62-2(e)(1)). A safe harbor definition of a "reasonable
time" is 60 days (Reg. Sec. 1.62-2(g)(2)(i)).

So, to the extent the expenses were not submitted to the
employer within 60 days, the reimbursement is treated as
coming from a nonaccountable plan. The employer must
include the reimbursement in the employee's W-2, and the
employee can deduct them only as a miscellaneous itemized
deduction.

Moral: get that expense report in within 60 days!

Katie in San Diego

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"Stuart A. Bronstein" <spamtrap[at]sbcglobal.net> wrote:

- quote -

The employer has the choice between accountable and
nonaccountable plans. AFIAK they're free to set their own
standards for accountable, as long as they meet the
statute's conditions.

As I recall the OP, part of this employer's rules for the
accountable plan is that expenses be claimed within 60 days.
After that, it's a nonaccaountable reimbursement subject to
payroll taxes and includable in the employee's income. The
only way to get rid of it is an employee business expense
deduction.

--
Phil Marti
Clarksburg, MD

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"Phil Marti" <prm20871[at]verizon.net> wrote:

- quote -

Why should this kind of thing be on his return at all? In
essence he lent money to the company. When they paid him
back they put it on his W-2. I don't see why it should be
subject to the 2% exclusion. The employer misstated income.
Why should the taxpayer suffer?

Stu

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braveheart002002[at]gmail.com wrote:

- quote -

Form 2106.

Missy Doyle

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<braveheart002002[at]gmail.com> wrote:

- quote -

I think you can call it "unreimbursed employee business
expense" (since they increased your pay rather than giving
you a reimbursement), but that's subject to a 2% of income
haircut before it's worth anything.

Seth

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<braveheart002002[at]gmail.com> wrote:

- quote -

No, you didn't "pay the tax." They withheld from this
payment as they would from any wage payment.

- quote -

Maybe. Partially. You can claim the expenses for which you
received taxable reimbursement on Schedule A, subject to the
2% of AGI exclusion for miscellaneous itemized deductions.

--
Phil Marti
Clarksburg, MD

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My company has a policy that if the business travel expense
vouchers are filed after 60 days of the expense they are
treated as income and thus will add up to the income in the
w-2 form. Now I did have this situation and I had used the
after tax money for the business travel expenses and ended
up paying tax on it again when I got the expense voucher
money.

Is there any way to make adjustments when filing the year
end taxes so that i dont end up paying double tax on the
amount spend on business travel expenses ?

Thanks

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