TCJA and Employee Business Expenses

Tax Cuts and Jobs Act (TCJA) eliminates the unreimbursed employee business expenses deduction on individual returns. Employees can no longer deduct these expenses on their own returns.

The good news: Employers can deduct business expenses paid by their employees when the expenses and reimbursing payments are tracked in an accountable plan. Business travel, lodging, car rental and meals are just some of the expenses your employees may incur while on business this summer and going forward. TCJA tightens the deductibility of meals and disallows deduction of entertainment expenses; giving rise to a need for additional guidance from CPAs, Treasury Department and IRS. As guidance continues coming in, now is a great time to implement new or revise existing accountable plans. Find Accountable plan guidance for employers at SoundCPA Insights for Business.