Accountable Plan

Accountable Plan

A plan used by a business to reimburse its employees for expenses they incur for work purposes. For example, an employee on a business trip may be required to pay for a hotel room with his/her own money and later receive a reimbursement. Under an accountable plan, the reimbursement the employee receives is not included in his/her income. Because it is not part of one's income, the reimbursement is not a tax write-off, which is why the accountable plan was devised.

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Accountable Plan

A plan for reimbursing employees for expenses such as meals, entertainment, travel, and transportation incurred for business purposes on behalf of the employer. A plan is an accountable plan if the employer requires the employee to adequately account for all business expenses and to return any excess reimbursements. For employees under an accountable plan, reimbursements aren't entered on the tax return as income and the expenses aren't deductible.