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where_ to_deduct_expenses - records(receipts • employee...

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

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