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My company added expense reimbursements to my income

jmbullet — Sun, 02 Feb 2020 02:06:23 GMT

My company added expense reimbursements to my paychecks (about $6000). As a result taxes were deducted as if I earned this money. But it was for reimbursing me for expenses I incurred.

Can I deduct that $6000 on my tax forms so I am not paying taxes on it?

Thanks, Jeff

Re: My company added expense reimbursements to my income

Critter — Sun, 02 Feb 2020 02:15:41 GMT

Ok ... if you are a W-2 employee there is NOWHERE you can deduct the expenses. And if you handed in an expense report and were reimbursed for the out of pocket expenses they should NOT have added this to your W-2 form ... have a word with the employer.

Re: My company added expense reimbursements to my income

rjs — Sun, 02 Feb 2020 02:26:06 GMT

No, you can't deduct it. Under the new tax law, employee business expenses are not deductible for 2018 through 2025.

If the reimbursements were paid under an "accountable plan" they should not have been included in your W-2. An accountable plan has to meet a number of requirements. The most obvious aspect of an accountable plan from the employee's point of view is that you have to submit expense reports.

If your employer does not have an accountable plan, then the reimbursements are taxable income to you, and including them in your W-2 is correct.

But your description of what your employer did is a little vague. You said that the reimbursements were included in your paychecks, and that tax was withheld on them. But are you sure that the reimbursements were actually included in box 1 of your W-2? That's the real key. If they are not included in box 1, then you are not paying tax on them, even if tax was withheld on them.

As Critter suggested, if your employer does not have an accountable plan you should talk to them about the fact that employee business expenses are no longer deductible. A non-accountable plan worked okay prior to 2018 because you could deduct the expenses on your tax return, but that's no longer true.