Are Reimbursed Work Expenses Tax Deductible for 2025 Filing?

This is helpful but I'm a bit confused. I thought I saw something about needing to report reimbursements as income and then claiming the expenses? Or is that only for non-accountable plans?

That's a great question. You only need to report reimbursements as income when they're part of a "non-accountable plan" - which is essentially when your employer gives you money without requiring proper documentation or business purpose. In a non-accountable plan scenario, the reimbursements would be reported as income on your W-2, and then you'd have to claim the expenses as itemized deductions on Schedule A, subject to the 2% AGI floor (which was suspended until 2026). This is much less favorable tax treatment.

Does taxr.ai handle situations where the reimbursement happens in a different tax year from when you made the purchase? Like if I buy stuff in December 2024 but don't get reimbursed until January 2025?

Curious if this works for more complicated situations? My company reimburses me for mileage and meals too, not just office supplies.

Yes, taxr.ai handles cross-year reimbursements by helping you document when the expense occurred versus when you received the reimbursement. This matters because you want to make sure everything is properly aligned and documented if there's ever a question. For more complicated situations involving mileage and meals, it definitely works well. The system is designed to handle various types of business expenses and reimbursements, including per diems, mileage at the standard rate, and actual meal costs. It helps ensure you're following the correct rules for each type of expense.

How does this actually work? Does it just call the IRS for you? I'm confused about how they get you through when calling directly means waiting forever.

Yeah right. Nothing gets you through to the IRS faster. They're designed to make it impossible to talk to a human. I'll believe it when I see it.

The service uses technology to navigate the IRS phone system and wait in the queue for you. They call you back once they have an IRS agent on the line, so you don't have to waste your time on hold. It's basically like having someone wait in line for you. Yes, I was skeptical too before trying it. The IRS phone systems are deliberately understaffed and overwhelming. But this service has figured out how to efficiently navigate their system and secure a place in line. Once they reach an agent, you get a call to connect with them. It's not magic - just smart use of technology to solve a frustrating problem.

Thanks for pointing this out! My company only does reimbursements after I submit receipts, so it sounds like I'm good. But do you know how advances are treated differently?

Advances can be tricky. If you receive money before incurring the expense, it might be considered an "advance" rather than a reimbursement. If you don't provide adequate documentation afterward or don't return unused funds, the IRS might consider it a non-accountable plan. In a non-accountable plan situation, the advance would be included in your W-2 income, and you'd have to claim any eligible expenses as miscellaneous itemized deductions (which are currently suspended until 2026). Much worse tax treatment than a proper accountable plan reimbursement.

I've been using Expensify for the past year and it's been great. You can snap photos of receipts on the go and it automatically extracts the info. Makes submitting to accounting super easy too.