Taxable vs Non-Taxable Fringe Benefits

InEducator

Employee expense reimbursements are subject to IRS guidelines and can be disallowed as expenses – and even considered compensation to those employees – if not handled correctly. Further, if employee expense reimbursements do not meet IRS guidelines, they may be disallowed as expenses and considered compensation to those employees, leaving the employer responsible for the associated payroll taxes – plus any penalties.

Taxable and nontaxable fringe benefits are scattered throughout the Internal Revenue Code. Benefits can be hidden in Sec 274, 162, 119, 132, 127, and 82. Add in numerous Announcements, Notices, and Regulations and we have a complex web. This course will concentrate on the development of an Accountable Reimbursement Plan under Sec 274 and accompanying regulations plus recent pronouncements and inflation increases.

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