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Employee expense reimbursement (Pre-Tax)

San Francisco, CA |

I am working for a IT Consulting Firm. Rather than give me a direct raise in Salary, they advised me to claim Regular Expenses like Phone bills, Gas mileage bills for work, Travel related bills - all amounting upto a certain amount of dollars every Quarter.

Can you please explain the Tax implication for this and is it beneficial to do this instead of a Salary raise?

Attorney Answers 3

Posted

Employer must reimburse you for travel-related bills, by law.
Employer need not reimburse you for your regular work commute.

To understand your legal rights, I recommend you talk to a CPA or tax attorney. Most lawyers, including myself, disclaim tax advice, because it is a potential malpractice trap.

Once you understand what is and what is not permitted, then I recommend you talk to an experienced employment lawyer about your strategic options for dealing with the employer. Complaining to your boss can put a bullseye on your back, so it helps to plan ahead.

Best,

David Mallen

David A. Mallen offers answers on Avvo for general information only. This offer of free, general answers is not intended to create an attorney-client relationship. If you need specific advice regarding your legal question, you should consult an attorney confidentially. Many experienced California labor and employment attorneys, including David A. Mallen offer no-risk legal consultations to employers and employees at no charge. David A. Mallen is licensed to practice law before all state and federal courts in California, as well as the California Labor Commissioner and the California Unemployment Insurance Appeals Board. Failure to take legal action within the time periods prescribed by law could result in the loss of important legal rights and remedies.

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Posted

You should have filed a form 2106, Employee Business Expenses in the past. If you did not you can go back 3 years to amend your returns. If you account to your employer for these expenses, you can not deduct them but they are not recognized in your income either. As a precaution, get it in writing even if you just send an e-mail confirmation but better to have it on their letterhead with an explanation. Also, you should do a estimation of the benefit. Last, it there a cap? Last again, it is not a bad idea.

Disclaimer of California Attorney. Laws differ from state to state. Although the above response is believed to be accurate, it should not be relied upon as any type of legal advice because the information provided is incomplete. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. No attorney client relation is formed with me without a written contract. Good Luck starts with a strategy and a plan. Robert J. Suhajda, MS,CPA Attorney-At-Law 17721 Norwalk Blvd. #43 Artesia, CA 90701 562-924-8922 Tax Relief Lawyer. Former financial auditor and controller. Admitted to US Tax Court, Income Tax, IRS representation, Fiduciary income tax returns, Estate and Gift tax returns, Homeowner Association Strategist.

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Posted

You may claim certain qualified employee business expenses on a form 2106, itemized deduction, regardless if you receive a raise or not. Your personal tax return is confidential. Take the raise. (there are several rules to taking employee business expenses)

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1 comment

Raymond F. Haselman

Raymond F. Haselman

Posted

Additionally, analysis should to be made as far as the 'pre-tax' or 'after tax' deduction, so a professioanal would be able to look at all aspects.

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