Your best tactic then would be to request reimbursement by your company--specifically under an accountable plan
. (See Trusted advice.) Then, you would get cash back without having to report taxable income, and the company would get a business deduction.
Going forward, employers can help their employees by implementing an accountable plan
to reimburse them for their business expenses, including home office.
If the employer's payments are made in accordance with what the IRS calls an "accountable plan
," which generally requires employees to substantiate all reimbursed expenses and return any advances in excess of expenses incurred, "the business can deduct the payments made under the plan for federal income tax purposes, although meal reimbursements are still subject to the 50 percent disallowance," he said.
Rather than a taxable bonus, you could ask your employer to create an "accountable plan
" that reimburses you for business expenses.
Does the company use the per diem method to reimburse employees or the accountable plan
An owner-employee can obtain reimbursement for the costs of a home office under an accountable plan
; the costs of the home office become deductible by the corporation, while the owner-employee is not taxed on the reimbursement.
But when the employer makes these payments under a so-called "accountable plan
," they're free from federal income and employment taxes for recipient employees.
Amounts paid to an employee under an accountable plan
for tickets to a sporting event must meet several conditions, in addition to the usual accountable plan
requirements, to be deductible as a business expense by the employer.
Most employers take advantage of the accountable plan
rules to deduct travel and entertainment expenses.
This program improved outcomes and behaviors: Meetings started and ended on time, had a defined purpose and the right people were in attendance; meetings stayed on topic and participants developed an actionable and accountable plan
for follow up.
The court's definition in TLC is inaccurate to the extent in relies on the accountable plan
rules, which cover only employee reimbursement arrangements, in determining the existence of a reimbursement or other expense allowance arrangement to identify who bears the expense under
This includes wages, employee benefit and deferred compensation plans, employer-provided fringe benefits, reimbursement of payments to employees under an accountable plan
for the employee's business travel expenses, and payments made by the employee to providers of the employee's travel, meals, and lodging when the employee is traveling on government business and is reimbursed under the accountable plan