Employee-paid Business Expenses.

OPERATING costs; BUSINESS travel costs; PROFESSIONAL fees

If the IRS determines a plan is nonaccountable, all reimbursements will be transformed into taxable wages and will be subject to income tax for the employee, as well as to employment tax for the employee and employer. Employers should discuss with their employees just which business- related expenses the employees may have paid in the course of doing their jobs but not requested (or been offered) reimbursement for. Employers can improve employee relationships by recognizing, and funding, the justifiably important and fully deductible (for the employer) business expenses in a way that does not burden their employees. [Extracted from the article]

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