Accountable Plans

1. An employer with an expense arrangement that allows for advances requires the employees to account for expenses incurred semi-annually. Are amounts reimbursed under the plan taxable?

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2. An expense allowance arrangement allows for the reimbursement of travel expenses incurred for business travel. CEO and CEOs spouse go to NY on a business trip and incur the following expenses:

CEO airfare $400

Spouse airfare $400

Meals $600

Hotel $1000

Theater tickets $300

How will the payment of these expenses be reported to the employee?

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3. Kurt drives 10,000 miles in 2018 for business. Under her employers accountable plan, he gets reimbursed 60 cents a mile, which is more than the standard mileage rate of 54.5 cents a mile. His total reimbursement is $6000. How is this payment reported?

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4. Kevin is paid $2000 a month by his employer. On days that he travels away from his home on business, his employer designates $50 a day of his salary as paid to reimburse travel expenses. How is the $50 reported when he travels away from Home? Whenhe does not ravel away from home?

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5. ABC Company pays its sales force substantiated expenses not in excess of $5000 per month. John, a new hire, wants to have a larger expense budget and has offered to reduce his sales commissions to accommodate that larger payment. ABC Company agrees and sets a $6000 budget for John, reducing commissions otherwise payable to John by the $1000. How should the $6000 be reported to John?

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Assume John does not offer to reduce his commissions and ABC agrees to a cap of $6000 for John, leaving the other sales people with a $5000 monthly expense reimbursement cap. How should the $6000 be reported to John?