![]() ![]() It is then reported on the employee’s Form W-2 and is subject to taxes. However, if any of the 3 requirements of an accountable plan (as mentioned in FAQ 1) are not met, the reimbursements are treated as paid under a nonaccountable plan, which is considered income. The employer deducts the reimbursements as business expenses. Since the IRS does not consider accountable plan reimbursements as income, the employer avoids payroll taxes and W-2 reporting. How does an Accountable Plan affect business taxes? To know about the standardized per diem rates in the US, click here. The IRS mandates employees to submit actual receipts of all these expenses with the expense report unless the company uses a per diem plan in place of direct reimbursement.
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