Reimbursing Employees For Expenses: Navigating Taxes

Employers often give travel advances, reimburse business expenses or let employees use company property. Unless reimbursements are made under an accountable plan, they must be treated as wages, and expense reimbursement is a target of an IRS audit initiative. This 90-minute employee expense reimbursement webinar explains how to get it right.

You'll learn the Internal Revenue Code rules on business expenses, accountable versus non-accountable plans, and the substantiation needed to exclude reimbursements or benefits from wages. The session covers per diem payments, including maximum rates and the high-low method, and how to control per diem abuse.

It also covers personal use of vehicles and phones, travel advances, payment cards and payroll and AP controls.

• Determine whether a reimbursement qualifies for exclusion from wages
• Substantiate expenses and benefits under an accountable plan
• Know when reimbursements or use of company resources must be included in wages
• Use per diem rates, including maximum rates and the high-low method
• Set up and administer an accountable expense reimbursement plan
• Process reimbursements and recover excess advances on time with sound controls

• Employee business expenses and reimbursements under the Internal Revenue Code
• Accountable and non-accountable reimbursement plans
• Substantiation needed to exclude reimbursements or benefits from wages
• Options for meeting substantiation requirements
• Advantages and effective use of per diem payments
• Controlling the risk of per diem abuse
• Personal use of company property such as vehicles and cell phones
• When reimbursements or use of company resources must be included in wages
• Travel advance and payment card administration
• Timely processing of reimbursements and recovery of excess advances
• Control and accounting procedures and the roles of payroll and accounts payable

Accountable plans save taxes for employers and employees, but weak documentation or procedures can turn reimbursements into wages, with extra tax, possible penalties and liability for taxes not withheld. This session shows how to account for and report reimbursements and employee benefits in line with IRS requirements.

It suits payroll and AP staff, accountants, auditors, tax compliance officers, enrolled agents, benefits administrators, business owners and public agency managers.

• Payroll Supervisors and Personnel
• Accounts Payable Supervisors and Personnel
• Public Accountants
• Internal Auditors
• Tax Compliance Officers
• Enrolled Agents
• Employee Benefits Administrators
• Officers and Managers with Tax Compliance Oversight
• Company / Business Owners
• Managers/ Supervisors
• Public Agency Managers
• Audit and Compliance Personnel / Risk Manager

Patrick Haggerty is a tax practitioner, author, and educator. His work experience includes non-profit organization management, banking, manufacturing accounting, and tax practice. He began teaching accounting at the college level in 1988. He is licensed as an Enrolled Agent by the U. S. Treasury to represent taxpayers at all administrative levels of the IRS and is a Certified Management Accountant. He has written numerous articles and a monthly question and answer column for payroll publications. In addition, he regularly develops and presents webinars and presentations on a variety of topics including Payroll tax issues, FLSA compliance, information returns, and accounting.