When you’re traveling for business and looking for a way to pay for expenses, you might not know where to start. Corporate travel reimbursement is a complicated topic that can get confusing if you’re not careful. In this article, we’ll explain what expenses are covered under corporate reimbursement programs, as well as some popular strategies companies use when reimbursing their employees.
Mileage reimbursement is the most common form of reimbursement. You can claim mileage reimbursement for business travel in your own vehicle, using a company vehicle or public transport.
Other types of reimbursements include expenses incurred while on leave and expenditure on freight transportation (if you are not reimbursed under this category).
Here are the rules for entertainment reimbursement:
- Only 50% of the cost of meals and entertainment is tax deductible.
- Only 50% of the cost of transportation is tax deductible.
- Only 50% of the cost of gifts is tax deductible.
- Only 50% of the cost of business travel is tax deductible
Employee Cell Phones or Other Electronic Devices Used for Business Purposes
You can be reimbursed for the cost of a cell phone, laptop or tablet that is used for business purposes. You must have a written policy for travel reimbursement of cell phones, laptops and tablets. If you do not have such a policy, then you are not covered by this section as it applies only to those who have one in place.
You must also have a written policy for reimbursement of internet access fees if they are used by an employee while on business trips or at work (but they don’t need to be charged). This includes both Wi-Fi and data plans if they’re needed because there aren’t any other options available in your area at all!
Travel & Lodging Expenses:
In accordance with IRS guidelines, travel and lodging expenses are reimbursed in accordance with the following:
- Business trips. You can claim travel and lodging expenses for business trips if you meet the following requirements:
- The trip was of sufficient length to constitute an ordinary and necessary expense of your trade or business
- You were away from home overnight on at least one day of the trip
Food and Meal Charges while Traveling on Business.
You can be reimbursed for food and meal charges while traveling on business. To be eligible, the expenses must be directly related to your business travel. The amount of reimbursement is based on the cost of the meal or the federal per diem rate that applies to your category of travel (airfare, mileage, lodging).
Medical and dental expenses are reimbursed, but only when the employee has a medical or dental plan that is not paid for by the employer. If you have such a plan and are reimbursed for your own medical or dental expenses, this will be deducted from any reimbursement paid to you.
In order to qualify for reimbursement of medical/dental expenses, your policy must state that it covers 100% of all covered expenses incurred by an eligible employee (including deductibles). If your policy does not cover 100% of all covered expenses incurred by an eligible employee (including deductibles), then no reimbursements can be made under this program.
Unused Vacation Expenses.
If you do not take all of your vacation time, the company has the right to deduct from your final paycheck. You may be able to recoup some of this amount in the form of vacation pay or comp time if they can prove that you used up all or part of your annual leave.
If an employee has unused vacation time and continues working beyond what is allowed by law during their allotted number of days off each year (48 hours per week), then they will be receiving an additional hour for every day worked beyond what would normally have been required.
Employee Development and Education.
- Educational expenses should be reimbursed if they are related to the employee’s job.
- Employees should be able to document all educational expenses, including the amount of time spent studying and how much money was spent on each course.
- Employees must also prove that their education will help them advance their career in some way, like by preparing them for a new position or opening up new opportunities within their organization.
Uniforms, Tools and Equipment Expenses.
The reimbursement of these expenses is allowed only if the employee is required to wear a uniform or tools and equipment. Uniforms, tools and equipment can be claimed as per one of the following methods:
- If you are wearing the same type of uniform with different names in your home office, then this would be considered as two sets of items. One would belong to you (the corporate employee) and another one belongs to your employer (the company).
- If you have used different types of uniforms for work purposes only, but not for personal use at home, then it will be considered as two sets of clothes. One set belongs to you (corporate employee), while another set belongs to your employer (company).
Charitable Contributions and Donations
Charitable contributions and donations are monetary gifts made to a non-profit organization. Donations can be made in cash or property, and may also include time, professional services or equipment.
The way you make your charitable contribution or donation depends on the type of financial transaction that is being used:
- A cash contribution (i.e., a check) must be made directly to the charity at its address listed on Form 990-PF or Schedule A attachment with Form 1040 tax return form (line 16). You should give this amount directly to the charity so they can receive it quickly. If you are donating stock shares instead of cash, then you need to send them an IRS Form 8868 “Request for Declaration Under Section 6104(b)(2)(B)” along with your actual check written out as an “in kind” donation from either one share worth 50 cents per share ($25 worth) or more than 500 shares worth $250 each ($1250 worth – minimum required amount per donor).
Rules for reimbursement in the corporate sector vary. These strategies can help you understand the guidelines.
- The rules for reimbursement in the corporate sector vary. These strategies can help you understand the guidelines.
- You must keep records of all expenses, whether travel or food or entertainment, and make sure that these records are accurate. If you have to pay someone else to do this work, then consider getting them certified as a CPA before going through with it.*
The rules for reimbursement in the corporate sector vary, but there are some general guidelines you should follow.