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Do I have to pay taxes on my employee reimbursed business expenses?




If you’re an employee, please read on.



As an employee you may have some business expenses which can include:


  • Eating Out

  • Airfare & Hotels/Air BNB

  • Ubers/Lyfts

  • Client Gifts


Employer's usually will reimburse an employee for any business expenses that were spent.


A question that we regularly get is:


Do I have to pay taxes on my employee reimbursed business expenses?


No! You don't IF you're reimbursed under an Accountable Reimbursement Plan. Pretty simple: it means that the employee submits an expense receipt with the receipts for the expenses. Once submitted, the employer will reimburse.


Sometimes, an employer will maintain a Non Accountable Reimbursement Plan. That means the employer may pay the employee a flat payment, for example, $500 monthly to cover your business expenses. Here the employee does not have to submit any receipts. In this case, the $500 IS taxable and the employee can't write it off.


To be allowed no tax, the Accountable Reimbursement Plan must be in place.


Do you have employee business expenses?

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