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Can I count my subordinate's per diem for tax-free reimbursement purposes?

I am about to be employed by a company that will be reimbursing me for my travel expenses. As I will be traveling full-time, this is an important issue for me. I raised this issue first in the newsgroup misc.business.moderated (thread title "Does reimbursements increase one's taxable income?") and one of those that replied suggested I ask a tax newsgroup a question. That question is whether or not I can count my subordinate's Federal per diem rates. I will have executive assistants traveling with me and my company tells me that if I pay their travel expenses, the company will reimburse me. As I understand it (from what was said in the replies in the other newsgroup's thread), I can essentially ignore for tax purposes the money my company reimburses me as they do on 1099 as long as it is a legitimate travel expense and below some certain amount. However, one of the reply posters didn't know if I could do likewise when paying for the travel expenses of my EAs. The company's idea is to simplify the whole process by me paying it all and company reimbursing just me. However, if it raises my taxable income, that's another issue. Is that an issue?

Thanks in advance!

Scott Jensen

Reply to
STJensen
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I'm not as sanguine as Paul without some more information.

  1. Are you and the subordinates employees of the company? I ask because you threw a 1099 into the mix, which doesn't apply to employees.
  2. Is it an "accountable" plan of reimbursement for you and your subordinates? That means that you submit the expense reports and the company reimburses you within allowable guidelines.

If all are employees of the company and it's an accountable plan, then it has zero effect on your taxes.

Reply to
Phil Marti

And if not all employees, you'll have to figure out who takes only the

50% tax deduction allowed on meals and entertainment.

-Mark Bole

Reply to
Mark Bole

Yes to both. That's good to know. I'll then do it.

As for the 1099 error, that number was raised by a poster in the other newsgroup and I didn't correct it before posting here. I realized the second after I fired off the post.

Phil and Paul, thanks for the replies!

Scott Jensen

Reply to
STJensen

Does this apply to groceries bought while on business travel? Due to severe food allergies, one of the jobs of one of my assistants is to be my cook and we will be staying in "extended stay" hotels for their kitchenettes for this reason. Thus the EA will locally grocery shop and cook for all of us. We won't eat at restaurants.

Scott

Reply to
STJensen

Yes, the 50% limit applies to groceries.

Reply to
Bill Brown

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