Reimbursing Employee Business Expenses: Navigating Taxes (2023 Updates)

Employee expense reimbursement is one of the targets of a current IRS audit initiative. Employers often provide travel advances, business expense reimbursement, or use of company property to employees. Unless expense reimbursements are made under an accountable plan, the payments must be included in employee wages. Accountable expense reimbursement plans provide tax savings for both employers and employees.  But insufficient documentation or faulty procedures can result in the reclassification of the reimbursements as wages. This results in additional tax and possibly penalties. An employer may even become liable for taxes it failed to withhold from the employee reimbursement.

This webinar will cover tax compliance for employee business expense reimbursements under both accountable and non-accountable employee business expense plans.

While the Tax Cuts and Jobs Act (TCJA) did not change the treatment of employee business expenses reimbursed under an accountable plan, employee expenses that are not reimbursed under an accountable plan may no longer be deducted by the employee.

Accountable reimbursement plans have strict documentation and record-keeping requirements and require timely reporting and return of excess reimbursements by employees. For certain expenses, per diem arrangements can be used in place of actual substantiation of the amount of expense. 

This webinar will include a discussion of these requirements as well as how to report reimbursements that do not qualify under the accountable plan rules and identify reimbursements that must be included in employee wages. You will also learn how to properly report expense reimbursements and facilities provided to employees in compliance with IRS requirements.

Upon course completion, you will be able to:

• Determine whether an expense reimbursement qualifies for exclusion from employee wages
• Know what is required to substantiate various expenses and benefits under an accountable plan
• Understand the importance of timely processing of reimbursements and collection of excess advance funds
• Know when expense reimbursements or use of company resources must be included in wages
• Recognize when per diem rates may be used and why employers may want to use them
• Know how to calculate maximum per diem rates and how to use the high-low method
• Know how to establish and administer an accountable expense reimbursement plan
• Identify the importance of control and accounting procedures related to expense reimbursement

• Employee business expenses and reimbursements under the Internal Revenue Code
• Accountable and non-accountable expense reimbursement plans
• Substantiation and documentation required to exclude reimbursement or benefits from wages
• Options for meeting substantiation requirements
• Advantages and effective use of per diem payments
• How to control the risk of a “pattern of abuse” of per diem payments
• Valuation and treatment of personal use of company property (vehicles, cell phones, etc.)
• When expense reimbursements or use of company resources must be included in wages
• Travel advances and payment card administration
• The importance of timely processing of reimbursements and collection of excess advance funds
• Control and accounting procedures and the roles of payroll and accounts payable

This webinar will provide valuable insights to: 

• Payroll Supervisors and Personnel
• Accounts Payable Supervisors and Personnel
• Public Accountants, Internal Auditors
• Tax Compliance Officers, Enrolled Agents
• Employee Benefits Administrators
• Company / Business Owners
• Managers/ Supervisors
• Public Agency Managers
• Audit and Compliance Personnel / Risk Managers
• Officers and Managers with Tax Compliance Oversight