Reimbursements for expenses like mileage can be taxable for employees depending on if your business has an accountable plan. Let’s go over what an accountable plan is and the impact it can have on your business taxes.
What Does An Accountable Plan Mean?
An accountable plan is a system for handling your reimbursements or allowances for employees. It must satisfy the following requirements:
- There’s a business connection
- Employees provide some form of substantiation
- Employees return excess amounts