Debra A. Simmons, CPA

Employee Business Expenses

In Income Taxes on March 18, 2011 at 2:41 pm

If you itemize deductions and are an employee, you may be able to deduct certain work-related expenses. Expenses that may qualify for an itemized deduction include:

*Business travel away from home
*Business use of car
*Business meals and entertainment
*Use of your home
*Miscellaneous expenses

If your employer reimburses you under an accountable plan, you do not include the payments in your gross income, and you may not deduct any of the reimbursed amounts.

An accountable plan must meet three requirements:

*You must have paid or incurred expenses that are deductible while performing services as an employee.
*You must adequately account to your employer for these expenses within a reasonable time period, and
*You must return any excess reimbursement or allowance within a reasonable time period.

If the plan under which you are reimbursed by your employer is non-accountable, the payments you receive should be included in the wages shown on your Form W-2. You must report the income and itemize your deductions to deduct these expenses.

For more information on employee business expenses contact Debbie at (310) 701-1825.


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