FinanceRegs.com » One travel expense you shouldn’t reimburse

One travel expense you shouldn’t reimburse

August 7, 2008 by Carol Katarsky
Posted in: Best practices, Communication, In this week's e-newsletter, Latest news & views, T&E, Tax compliance

With every expense report, you have to check for “non-reimbursable” charges that have been slipped in. Dry cleaning? Seen it. In-room movies? Been there, handled that. But what about hotel charges for use of the facility’s gym? 

Many companies do reimburse that (knowingly or otherwise) as part of the traveler’s room charges. But if you do reimburse those fees, it’s taxable as income to the employee. 

IRS’ reasoning: Using the gym is a personal expense and the gym isn’t on the employer’s property.

If your company is willing to foot the bill anyway, you’ll need to either:

  • warn the employee about the tax complications, or
  • encourage managers to have traveling employees book hotels where the use of the gym is covered by the standard room rate. 
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