Are reimbursed work expenses tax deductible on my return?

15 Thanks for explaining this! So what happens if my company reimburses me but doesn't require receipts? My boss just gives me a flat $200/month for my cell phone and internet but never asks for documentation. Is that handled differently?

8 That's a completely different situation! When you receive a fixed amount without having to document actual expenses, that's called a "nonaccountable plan." In that case, the $200 monthly allowance should be included as income on your W-2, and you'd potentially be able to deduct those expenses as unreimbursed employee business expenses. However, since the 2018 tax law changes, unreimbursed employee business expenses are no longer deductible for most employees unless you're certain qualifying professions like Armed Forces reservists, qualified performing artists, fee-basis state/local government officials, or employees with impairment-related work expenses. Most regular employees can no longer deduct these expenses.

5 Thanks for the explanation! Quick follow up - what happens if my company is slow with reimbursements and I don't get paid back until the following tax year? Does that change anything?

3 The timing of reimbursement can matter. If you submit an expense in December 2024 but don't get reimbursed until January 2025, it's generally still handled the same way - it's not your expense and not your income when reimbursed. The key is that you have a consistent company policy for reimbursement. If the delay becomes extreme (many months), the IRS might question whether it's truly an accountable plan. But typical processing delays that cross a calendar year boundary shouldn't be an issue as long as the reimbursement policy is followed.

12 How exactly does this work? Does it actually look at your specific documents or just provide general advice? I'm in a similar situation but my company reimburses me for mileage too and I'm not sure if that works the same way.

17 I've tried so many tax tools before that promised to help but just gave generic advice. Does this one actually provide personalized guidance or is it just another glorified FAQ page?

5 It actually analyzes your specific situation based on the information you provide. You can upload documents or just describe your situation in detail, and it provides tailored advice rather than generic information. For mileage reimbursements, the same general rule applies - if your employer reimburses you at or below the standard IRS mileage rate (currently 67 cents per mile for 2024) using an accountable plan, you don't report anything on your taxes. If they reimburse above that rate, the excess might be taxable income. The tool is definitely not just a FAQ page. It uses AI to analyze your specific documents and circumstances, flags potential issues, and provides citations to relevant tax regulations. It's like having a tax pro look over your specific situation without the high hourly fees.

12 How does it work with expenses that are partially reimbursed? My company only covers 75% of certain expenses and I'm never sure how to handle the remainder.

16 Is this taxr.ai thing legit? I've tried other tax help services before and they just spit out generic advice I could've found on Google.

8 For partially reimbursed expenses, that's where it gets tricky. The 75% that's reimbursed follows the normal rules - not your income, not your expense. But the 25% you're covering would be considered an unreimbursed employee expense. Unfortunately, these aren't deductible for most employees since the 2018 tax law changes unless you're certain qualifying professions like armed forces reservists, performing artists, or fee-basis government officials. As for whether it's legit - I was skeptical too initially! But it's way more specific than generic advice. It analyzes your actual documents and gives personalized guidance based on your specific situation. I uploaded my company's reimbursement policy and my expense reports and got clear direction tailored to my exact scenario.

3 Wait, I don't understand. How does this help with tax questions about reimbursements? Isn't this just for calling customer service numbers faster? My company's accounting department never answers emails about how they classified my reimbursements.

17 This sounds too good to be true. I've spent HOURS trying to reach my company's benefits department about how they reported my reimbursements. You're telling me this service actually gets a human on the line? I'll believe it when I see it.

9 It's not specifically for tax questions - it's a service that helps you reach actual humans at any phone-based customer service, including company accounting departments. For your situation with emails being ignored, that's exactly the problem I had. My accounting team never responded to emails about how they classified my reimbursements on their end. I used Claimyr to reach them by phone instead, and finally got the documentation I needed to properly report things on my tax return. The service works by navigating phone trees and waiting on hold for you. When they reach a human, they call you and connect you directly to that person. It saves you from spending hours listening to hold music or getting disconnected. It works with pretty much any customer service line, including internal company departments.

14 Wait, how does this actually work? They somehow get you to the front of the IRS phone queue? Sounds too good to be true.

16 Yeah right. Nothing gets you through to the IRS faster. They're probably just charging you to wait on hold while you do something else. How much does this scam cost anyway?

9 It actually navigates the IRS phone system for you and keeps your place in line. When an agent actually picks up, it calls your phone and connects you directly to them. You don't have to sit there listening to hold music for hours. It's not about skipping the line - it's about not having to physically wait on the phone. You go about your day and they call you when an actual human at the IRS is ready. Saved me a massive headache since I had already wasted hours trying to get through myself.

19 So what if I'm a w2 employee but also do some 1099 work on the side? If I buy supplies that I use for both jobs, how do I handle that? Can I deduct a percentage of those expenses on my Schedule C?

21 Exactly right. For mixed-use expenses, you would allocate the portion used for your self-employment work and deduct that percentage on Schedule C. Keep detailed records showing how you calculated the business-use percentage. For example, if you bought a $1,000 laptop and use it 70% for your self-employment work and 30% for your W-2 job, you could deduct $700 (70%) as a business expense on Schedule C. The 30% used for your employment would not be deductible. Keep in mind that these allocations should be based on reasonable, documented usage patterns in case you're ever audited. Photos of receipts and a log showing business vs. personal use are helpful supporting documentation.

8 Not a dumb question at all! Getting reimbursed is almost always better financially. Here's why: When you're reimbursed under an accountable plan, you recover 100% of your expense. It's a dollar-for-dollar recovery. If you weren't reimbursed and could somehow deduct the expenses (which most employees can't do anymore since 2018 tax changes), the deduction would only save you your marginal tax rate percentage. So if you're in the 22% tax bracket, a $100 deduction only saves you $22 in taxes - you're still out $78.

10 That makes so much sense, thank you! I was wondering because sometimes it seems like a hassle to submit all the documentation for reimbursement, but clearly it's worth it. I definitely want to recover 100% rather than just getting a small percentage back through a tax deduction.

5 What exactly makes a reimbursement plan "accountable"? My company is pretty small and informal about expense reimbursements.

11 An accountable plan needs to meet three IRS requirements: 1) Expenses must have a business connection, 2) You must adequately account for these expenses to your employer within a reasonable period of time, and 3) You must return any excess reimbursement within a reasonable period of time. In practical terms, this means you need to submit documentation (receipts, etc.), the expenses need to be legitimate business expenses, and if you get paid more than you spent, you return the difference. Without these elements, reimbursements could be considered taxable wages. Small companies sometimes miss this formality, but it's important from a tax perspective.

1 That's exactly what I've been doing! I get about 2% back on everything so that's like $80-100 free money every month. Almost makes it worth the hassle of fronting the cash. Do you have any issues with your credit score though? Sometimes my utilization gets pretty high before the reimbursement comes through.

18 Great question about the credit score impact. I definitely saw my utilization rate spike at times, which temporarily lowered my score by about 15-20 points some months. But as soon as the reimbursement came through and I paid off the card, my score bounced right back up. If you're applying for a mortgage or other major loan, you might want to be careful about timing and pay the card off before the statement closes. Otherwise, it's usually just a temporary dip that corrects itself after reimbursement.