Employers accountant started listing expense reimbursement as expense income on pay stub mid year, how will this affect my gross income?

[Bob19]

Expenses that were paid out of pocket were always reimbursed with a check.  Mid year the company accountant decided to reimburse through payroll as "expense income" which appears to be added to the gross income on the pay stub.  Will this be added on my W2 as additional income that I will be taxed on again?

[TaxGuyBill]

You would need to ask the accountant if it is being taxed or not (or decipher it based on your pay stubs).

If it is just being lump with your regular wages and not a separate item, it is probably taxable.  In that case, you could HYPOTHETICALLY deduct your business expenses on your tax return.  However, due to limitations and restrictions, unless the expenses are large, those deductions are likely not going to change your taxes. Also, the proposed tax reform would eliminate that deduction.

However, it likely it is still being treated as a non-taxable reimbursement ("accountable plan"), as that not only saves you money, it also saves the employer money.

But again, asking the accountant/payroll would probably be the easiest way to figure out how it is being handled.

[Opus 17 · Accepted solution]

Ask the accountant or wait for your W-2.  (My employer lists reimbursements on my pay stub, but they are not included in my W-2 wages.)  If not in your W-2, no problem.  If the expenses are in your W-2 box 1 wages, then the are taxable, but you can then take a tax deduction for them (subject to the 2% rule and itemizing, of course.)