Do I have to pay taxes on my employee reimbursed business expenses?

If you’re an employee, please read on.

As an employee you may have some business expenses which can include:

• Eating Out

• Airfare & Hotels/Air BNB

• Ubers/Lyfts

• Client Gifts

Employer's usually will reimburse an employee for any business expenses that were spent.

A question that we regularly get is:

Do I have to pay taxes on my employee reimbursed business expenses?

No! You don't IF you're reimbursed under an Accountable Reimbursement Plan. Pretty simple: it means that the employee submits an expense receipt with the receipts for the expenses. Once submitted, the employer will reimburse.

Sometimes, an employer will maintain a Non Accountable Reimbursement Plan. That means the employer may pay the employee a flat payment, for example, $500 monthly to cover your business expenses. Here the employee does not have to submit any receipts. In this case, the $500 IS taxable and the employee can't write it off.

To be allowed no tax, the Accountable Reimbursement Plan must be in place.

Do you have employee business expenses?