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Reimbursing Employee Business Expenses: Navigating Taxes
- Employee business expenses and reimbursements under the Internal Revenue Code
- Accountable and non-accountable expense reimbursement plans
- Substantiation and documentation required to exclude reimbursement or benefits from wages
- Options for meeting substantiation requirements
- Advantages and effective use of per diem payments
- How to control the risk of a “pattern of abuse” of per diem payments
- Valuation and treatment of personal use of company property (vehicles, cell phones, etc.)
- When expense reimbursements or use of company resources must be included in wages
- Travel advance and payment card administration
- The importance of timely processing of reimbursements and collection of excess advance funds
- Control and accounting procedures and the roles of payroll and accounts payable
Overview of the webinar
This webinar will cover the tax compliance for employee business expense reimbursements under both accountable and non-accountable employee business expense plans. This includes a discussion which expenses qualify as employee business expenses including travel, entertainment, transportation and facilities required for the employee to perform the job duties.
The session will cover the requirements for an accountable reimbursement plan including documentation and record keeping requirements, timely reporting and return of excess reimbursements, per diem arrangements in lieu of actual substantiation, reimbursements that must be included in wages and how to establish and administer an accountable expense reimbursement plan.
In addition to the general substantiation rules, the specific substantiation requirements for travel, entertainment, meals and listed property will be covered as well as the rules regarding personal use of company property such as vehicles or other facilities.
The discussion of per diem arrangements will cover when and which expenses may be covered by per diem arrangements, how to set qualifying per diem rates using the federal maximum rates, how to use the high-low method and how to handle company rates that exceed the federal rates.
The session will also discuss treatment of expense allowances and reimbursements or use of company facilities under a non-accountable plan or those treated as under a non-accountable plan including inclusion in wages, tax withholding and W-2 reporting requirements.
The importance of control and accounting procedures related to expense reimbursements will be discussed including employer responsibility for compliance and the potential for liability for un-withheld tax and penalties for non-compliance.
Who should attend?
- 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 Managers
Why should you attend?
Employers often provide travel advances, business expense reimbursement or use of company property to employees. Employee expense reimbursement is one of the targets of a current IRS audit initiative. Unless expense reimbursements are made under an accountable plan, the payments must be included in employee wages. Accountable expense reimbursement plans provide tax savings for both employers and employees. But insufficient documentation or faulty procedures can result in reclassification of the reimbursements as wages. This results in additional tax and possibly penalties. An employer may even become liable for taxes it failed to withhold from the employee reimbursement.
In this informative webinar, you will learn how to properly account for and report expense reimbursements and facilities provided to employees in compliance with IRS requirements.
Faculty - Mr.Patrick A. Haggerty
Patrick A. Haggerty is a tax practitioner, author, and educator. His work experience includes nonprofit 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 tax payers 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, and information return reporting.