The IRS imposes stringent record keeping requirements on taxpayers who deduct expenses relating to business travel and entertainment (T&E), including meals, and electronic devices like cellphones. This includes employees who use personal assets to accommodate their employer and are paid on a non-accountable plan. If you do not have the required proof, our deductions may be denied completely.
A non-accountable plan is defined as a fixed payment you receive from your employer to cover the use of your cell phone, auto, home expenses, etc. The payment you receive is included on your Form W-2 in your annual income subject to income taxes as well as Social Security and Medicare taxes. The expenses you incur are deducted on form 2016 which is then reported on Schedule A of your individual income tax return. Unfortunately, you may not get the full benefit of the expenses you incur due to the limitations imposed on unreimbursed employee expenses.
Stay tuned to our Next blog post for more information on Business Travel
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Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.