Per Diem & Car Allowance for S-Corp related to employer confusion?
Pub. 463 chapter 6 states "A per diem or car allowance satisfy the adequate accounting requirements for the amount of your expenses simply if all of the following conditions apply. "
One condition is not anyone related to the employer. "If you are related to your employer, you must be able to prove your expenses to the IRS even if you own already adequately accounted to your employer and returned any excess reimbursement."
1. Well, my wife owns the s-corp and I am the sole member of staff. Does this mean that the company can't reimbuse me at the per diem lodging, per diem M&IE, as all right as the mileage rate?
2. I am confused about the mileage rate because it is nominated under this portion.
3. I am also confused about the lodging and M&IE rates. Some blogs are wise saying that you can use the M&IE, but not the lodging. However from the way this read, I don't know if that is all right either.
Please Help!
Thanks contained by Advance...
Answers: The company can reimburse you at the per diem and mileage rates, however, any excess over your actual expenses will need to be included surrounded by your federal wages reported on your W-2. What the IRS is trying to do is to keep empire from claiming excess reimbursed expenses that are not claimed as income by the person human being reimbursed, especially in a situation where on earth the employer and employee are related. The per diem and mileage rates are typically more or less generous and recurrently times are more than what would be reimbursed in the actual expenses are used. The lodging rates are allowed to be used for reimbursement, but again, any excess should be reported on your W-2. If you be to repay any excess over actual to the employer, then it would not hold to be included in your W-2 wages, but build sure you keep receipts to substantiate the expenses within case of an audit.
when i travel i use the goverment M&IE.
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One condition is not anyone related to the employer. "If you are related to your employer, you must be able to prove your expenses to the IRS even if you own already adequately accounted to your employer and returned any excess reimbursement."
1. Well, my wife owns the s-corp and I am the sole member of staff. Does this mean that the company can't reimbuse me at the per diem lodging, per diem M&IE, as all right as the mileage rate?
2. I am confused about the mileage rate because it is nominated under this portion.
3. I am also confused about the lodging and M&IE rates. Some blogs are wise saying that you can use the M&IE, but not the lodging. However from the way this read, I don't know if that is all right either.
Please Help!
Thanks contained by Advance...
Answers: The company can reimburse you at the per diem and mileage rates, however, any excess over your actual expenses will need to be included surrounded by your federal wages reported on your W-2. What the IRS is trying to do is to keep empire from claiming excess reimbursed expenses that are not claimed as income by the person human being reimbursed, especially in a situation where on earth the employer and employee are related. The per diem and mileage rates are typically more or less generous and recurrently times are more than what would be reimbursed in the actual expenses are used. The lodging rates are allowed to be used for reimbursement, but again, any excess should be reported on your W-2. If you be to repay any excess over actual to the employer, then it would not hold to be included in your W-2 wages, but build sure you keep receipts to substantiate the expenses within case of an audit.
when i travel i use the goverment M&IE.