Article Date:
February 2020

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Per Diems Post-Tax Reform: What the TCJA Has and Hasn’t Changed

In a recent article, we highlighted the fact that accountable plans have become particularly important now, post-tax reform.


Why? The Tax Cuts and Jobs Act (TCJA) eliminated itemized deductions for employees who incur unreimbursed business expenses for 2018 through 2025.1


This means that if you, as the employer, don’t reimburse your employees for business expenses, your employees have no way of recouping any of that money via tax deductions (most unfair, for sure).


Let’s say you want to make things right. You want to reimburse your employees for their business travel expenses. The IRS travel per diem rules give you the possibility of reimbursing expenses with less risk because such per diems can eliminate most of the paperwork.


Further, the per diems set the rules and amounts for reimbursement, so you don’t have to worry about disagreements with your employees about what is a proper reimbursement amount.


This article focuses on per diems for employees. If you’re self-employed or have more than a 10 percent direct or indirect stock ownership and want to know how you as the owner can use per diems, see Does the Per Diem Expense Option Stick It to Business Owners? ... Log in to view full article.

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