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Tax Law (Questions About Taxes)/Reimbursed Expenses as Taxable Income
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Question
I recently became a consultant. I currently have the option of using a corporate card to pay for my expenses for travel and living, but I also have the option of paying on my own and then be reimbursed by the company. If I am reimbursed does that count as taxable incomme? How will it impact my taxes? Where can I look to find out more about taxes when consulting in a different state then where I reside?
Jill,
Thanks for your question.
If you submit your expenses to the company and are reimbursed for actual expenses, the reimbursements are not considered income. This would be what is referred to as an accountable plan.
Under a non-accountable plan, you would simply be given a set amount for an expense allowance and would not have to account for the funds to your employer. In this case, the expense allowance is taxable income, and you deduct your expenses.
I don't really know what you are looking at in terms of consulting in a different state. If you are referring to the issue of state taxation, that varies from state to state and is affected by your work status. From a federal tax standpoint, it matters not where the work is performed.
Hope this helps.
John Stancil, CPA
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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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