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I understand what your friend was telling you, and you explained it fine.
If your employer reimbursed you or gave you an advance or allowance for your employee business expenses that is treated as paid under an accountable plan, the payment should not be shown on your Form W-2 as pay. You do not include the payment in your income, and you may not deduct any of the reimbursed amounts. BUT if your employer paid you less than you actually paid or less than the per diem allowed then you would need to see IF itemizing would benefit you.
Using the Standard deduction on the EZ or using Schedule A and itemizing the amounts needs to be looked at to see which is higher.
The employee expenses are also limited on the Schedule A to what amount is over 2% of your Adjusted Gross Income.
I see you are in CHAT but I had a lot to explain
Did you want to interject something or just want to wait till I finish?
Sounds about the same as what I've read, it's just still confusing to me
Yeah, it can be
The main thing is how much your Adjusted Gross Income is
Let's say $50,000
2% of that is $1000, so any amounts you were not reimbursed for that are over $1000 would actually get to be on the Schedule A
That means that if your expenses were $1050, only $50 would actually show on the Schedule A not the whole $1050
It takes a little time to fill out the Schedule A but sometimes it is worth it
my fellow employee says he gets an additional 4k on his tax return because of what he claims. can that be right? sounded fishy to me
we both work over 300 days out of town in the same places
It could be possible but he may have other things that you do not or visa versa
Then this year you would want to make sure you try the Schedule A
If you have mortgage interest and charitable deductions that helps too
oh yes, for sure. thank you for your help. i will have to get a tax person to help me with my return this year
I was just going to say that
Do not go to the same person he uses though
Just in case they are giving him expenses he is not entitled to
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