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where_ to_deduct_expenses

where_ to_deduct_expenses - • employee must return excess...

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Where to Deduct Expenses? Employee vs. Self-Employed I. Where to deduct business-related expenses – in general A. FOR AGI (Schedule C) – self-employed taxpayer or independent contractor B. FROM AGI (Schedule A – subject to 2% limitation and standard deduction) 1 unreimbursed employee expenses 2. reimbursed employee expenses under a nonaccountable plan II. Two types of employer reimbursement plans A. Accountable plan 1. must have two elements substantiation – record keeping by employee
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Unformatted text preview: • employee must return excess reimbursement 2. tax treatment – a net wash • reimbursement is excluded from gross income • expenses are not deductible by employee B. Nonaccountable plan 1. fails at least one test – no substantiation, or does not require return of excess 2. tax treatment • reimbursement is included in gross income • expenses are miscellaneous itemized deductions (from AGI) subject to 2% floor and 50% disallowance for meals & entertainment...
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  • Spring '08
  • Kelliher,C
  • Taxation in the United States, unreimbursed employee expenses, employer reimbursement plans, income • expenses

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