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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Unreimbursed employees expenses
Expert: Bruce W. Tyler, EA - 11/3/2009
Question
Hi:
In 2007, I had unreimbursed employees expenses. I am no longer working for this employer. It is my understanding that these expenses would have been included in my W-2 as income in one of the W-2 boxes. Do you have more info about that? What box in the W-2? Anything else? I claimed these expenses on scehdule A but the IRS is looking at these. Any suggestions about how to defend myself?
Answer
Rolando,
Unreimbursed work related expenses are NOT included in a W-2 since they were not reimbursed to you. These out of pocket expenses are tax deductible on Form 2106.
However, expenses that ARE reimbursed are sometimes included on the W-2 as Code "L" in Box 12. Note that these expenses are considered non-taxable reimbursements.
It doesn't matter whether these expenses were included in your income or not. The entire issue here, as far as the IRS is concerned, is whether you were reimbursed for the expenses and those reimbursements were not part of the income in Box of your W2. In this case, you could not deduct them on Sch A since you were reimbursed and not taxed.
So, to sum up:
Out of pocket expenses + reimbursed by employer and NOT on W-2 = non deductible.
Out of pocket expenses + reimbursed by employer and included in Box 1 on W-2 = deductible.
Out of pocket expenses + not reimbursed by employer = deductible
Bruce Tyler, EA
Lancaster, CA.
661-724-1041
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