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Tax Law (Questions About Taxes)/Travel Expenses
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Question
I live in TN but work in PA. I travel every week to PA and have done so for about 2 years. The company that I am with is a consulting firm. They have me contracted out to a hospital there in PA. During my travel, I use the company assigned AMX for business expenses. Every week, the company pays AMX whatever I had charge during the week. The also, send a bill to the client for the reimbursement of those expenses. At the end of the year, the company totals the amount of expenses used on the AMX and adds this amount to my W2 line 1 making it appear as though I make this huge sum of money. They operate on an accountable plan. Is this legal. They tell me that they are well within the IRS guidelines of doing this.
Thank you
Gary,
Thanks for your question.
I am sorry to tell you that your employer is 100% correct. Since your assignment is more than 12 months, PA is considered your tax home. As such, your travel expenses are not deductible. Any reimbursement is considered taxable income.
Hope this helps.
John Stancil, CPA
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Answers by Expert:
- Rod Dorothy
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John Stancil, CPA
Expertise
I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 35 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants. Visit my website at www.johnstancilcpa.com. Also visit my blog, www.thetaxdocspot.com. Prepare and file your own taxes at www.1040stancilcpa.com
Experience
I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CGMA, and CFM. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 30 years and have taught accounting and tax at the college level for over 30 years.
Organizations
AICPA, FICPA, IMA, NATP
Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly.
Education/Credentials
DBA University of Memphis
MBA University of Georgia
BS in Accounting Mars Hill College
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