Limitations on Unreimbursed Employees Unreimbursed employee expenses are classified as miscellaneous itemized deductions Total of miscellaneous itemized deductions are reduced by 2%of aGi before any tax benefit realized If total miscellaneous itemized deductions do not exceed 2% of aGi or if total allowable itemized deductions do not exceed standard deduction Unreimbursed employee expenses may provide no tax benefit; also may affect high-income taxpayers who have 3 scale down of itemized deductions
Limitations On Unreimbursed Employees • Unreimbursed employee expenses are classified as miscellaneous itemized deductions. Total of miscellaneous itemized deductions are reduced by 2% of AGI before any tax benefit realized • If total miscellaneous itemized deductions do not exceed 2% of AGI or if total allowable itemized deductions do not exceed standard deduction, Unreimbursed employee expenses may provide no tax benefit; also may affect high-income taxpayers who have 3% scale down of itemized deductions
Travel Expenses Deductibility of travel expenses Definition of travel expenses ·50% disallowance of business meals General qualification don requirements Business versus pleasure Foreign travel Additional limitations
Travel Expenses • Deductibility of travel expenses • Definition of travel expenses • 50% disallowance of business meals • General qualification requirements • Business versus pleasure • Foreign travel • Additional limitations
Nature Of Expenditure Travel expenses for self-employed individuals and fully reimbursed employee travel expenses are deducted for AGl Unreimbursed employee travel expenses (whether insufficient or no reimbursement occurs)are deducted as a miscellaneous itemized deduction subject to the 2% nondeductible floor
Nature Of Expenditure • Travel expenses for self-employed individuals and fully reimbursed employee travel expenses are deducted for AGI • Unreimbursed employee travel expenses (whether insufficient or no reimbursement occurs) are deducted as a miscellaneous itemized deduction subject to the 2% nondeductible floor
Definition Of Travel Expenses Includes transportation, meals, and lodging related to a trade, business, or employee status incurred while away from the taxpayers tax home Deductible amount of travel expenses may be reduced if actual expenses are lavish or extravagant
Definition Of Travel Expenses • Includes transportation, meals, and lodging related to a trade, business, or employee status incurred while away from the taxpayer’s tax home • Deductible amount of travel expenses may be reduced if actual expenses are lavish or extravagant