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RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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Is it an appropriate business expense for a company to pay ...

Customer Question

Is it an appropriate business expense for a company to pay for an employees car payments as part of their bonus (similar to a vehicle expense allowance)? Thank you!
Submitted: 8 years ago.
Category: Tax
Expert:  RD replied 8 years ago.

Is this amount included in employees wages and taxes being withheld?

Customer: replied 8 years ago.
No, as part of my $50k bonus my boss said I could run $10k through as an expense advance which could include meals, travel, conferences/education and my car payments. I paid the car payments directly from the firm, and the remaining amount was a check written to me for an expense advance. I am no longer working with this company and he is now requesting the amount that went towards car payments back claiming it was not authorized. From a tax perspective, what's the best way to handle this. Can I simply request that he report this $10k as taxable income on my W-2?
Expert:  RD replied 8 years ago.

Yes- normally expenses reimbursed under a non accountable plan should be added as wages to the employee.

So you should have the amount reported to you as wages.

Here is a link for your reference-

http://www.irs.gov/govt/fslg/article/0,,id=164471,00.html