Now that itemized deductions have been suspended through 2025, employees can no longer deduct unreimbursed business expenses. Fortunately, you can help your employees out with a tax benefit that is also deductible by creating an accountable plan. When set up properly, it will allow you to reimburse employees for business travel and other related expenses while preventing the need to pay payroll taxes on the reimbursements. Many of your employees will be shocked and frustrated as soon as they learn that expenses they were able to deduct in the past will not be deductible to them starting with 2018…Be pro-active and create a plan with your employees that communicates what your are willing to reimburse them for and what you are not.
Call us if you have questions about setting up an accountable plan for your business.
