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Job Interview expense-reimbursement taxable?

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  • Avatar Medman80 
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    Hello all,

     

    On my attending job search for 2018 I incurred several thousand in expenses that my prospective employers reimbursed.  Would I have to show these funds on my tax return, would they be fully taxed?  A few of the employers made me sign a W2 but i have not received any 1099 as of this date.  All the funds received where after I provided receipts of expenses.  Thank you all!

    #193245 Reply
    jfoxcpacfp jfoxcpacfp 
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    I apologize, but I am having a bit of trouble following the terminology in your post (realizing it is difficult for someone who speaks physician to understand how to speak tax 🙂 ). Here is my interpretation of what you need to know…

    1. If your employer reimbursed your expenses, he will either include them on a W2 or 1099 (if you did not submit receipts) or not report them in your name (if you did submit receipts). The second option is referre to as an “accountable plan” and is the better option for an employee/prospective employee. It appears you were offered option #2. Did the prospective employers reimburse exactly what you submitted?
    2. You do not “sign” a W2, not sure what you are referring to. It would not be appropriate for you to receive a 1099 for these reimbursements.
    3. Job search expenses are no longer deductible beginning in 2018 (at least through 2025).

    Bottom line is that I suspect you have nothing to report but I cannot say for sure.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #193253 Reply
    Liked by Vagabond MD
    Avatar Medman80 
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    Thank you for the reply, let my try to clarify:

     

    The prospective employers reimbursed exactly what I submitted, nothing extra (had to give all receipts).  I am unsure whether they used an accountable plan, but some of them had me sign a W9 form (not W2, sorry).  I understand that job search expenses aren’t reimbursable, but would I need to report these reimbursement’s to the IRS as I had to sign the W9 form?

    #193281 Reply
    Avatar Peds 
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    was that in the chance you were hired by them?

    otherwise its no different than a friend paying your airfare….

    #193283 Reply
    Avatar Medman80 
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    was that in the chance you were hired by them?

    otherwise its no different than a friend paying your airfare….

    Click to expand…

    Could’ve been, they did not specify..so no need to show these reimbursement’s to IRS?

    #193287 Reply
    jfoxcpacfp jfoxcpacfp 
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    Thank you for the reply, let my try to clarify:

    The prospective employers reimbursed exactly what I submitted, nothing extra (had to give all receipts).  I am unsure whether they used an accountable plan, but some of them had me sign a W9 form (not W2, sorry).  I understand that job search expenses aren’t reimbursable, but would I need to report these reimbursement’s to the IRS as I had to sign the W9 form?

    Click to expand…

    I do not agree with @peds in this instance, since the prospective employers were not “friends” but had a business purpose for these expenses. Gifts from friends would not be deductible to the friends nor taxable to you.

    However, since you were neither an employee nor contracting with the potential employers and it appears they will not be reporting these payments, I would not report them, either. If we really dug into this one, I believe an argument could be made for taxation, but I’m not going there.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #193290 Reply
    Avatar Peds 
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    I do not agree with @peds

    Click to expand…

    so im right for the wrong reasons? a small victory!

    #193295 Reply
    Avatar Medman80 
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    Thank you for the reply, let my try to clarify:

    The prospective employers reimbursed exactly what I submitted, nothing extra (had to give all receipts).  I am unsure whether they used an accountable plan, but some of them had me sign a W9 form (not W2, sorry).  I understand that job search expenses aren’t reimbursable, but would I need to report these reimbursement’s to the IRS as I had to sign the W9 form?

    Click to expand…

    I do not agree with @peds in this instance, since the prospective employers were not “friends” but had a business purpose for these expenses. Gifts from friends would not be deductible to the friends nor taxable to you.

    However, since you were neither an employee nor contracting with the potential employers and it appears they will not be reporting these payments, I would not report them, either. If we really dug into this one, I believe an argument could be made for taxation, but I’m not going there.

    Click to expand…

    cheers

    #193300 Reply
    Liked by Vagabond MD
    Avatar Tim 
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    One could argue reimbursement of expenses incurred at the request of a prospective employer is not income. They requested a site visit for discussions. Research or employment, the business purpose was clear and for their benefit. See documentation submitted.

    My guess is any agent trying to argue and assess tax on that would be shortly looking for new employment.

    #193304 Reply
    jfoxcpacfp jfoxcpacfp 
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    One could argue reimbursement of expenses incurred at the request of a prospective employer is not income. They requested a site visit for discussions. Research or employment, the business purpose was clear and for their benefit. See documentation submitted.

    My guess is any agent trying to argue and assess tax on that would be shortly looking for new employment.

    Click to expand…

    That’s what this one (and @peds) argued.😀

    I don’t agree that an agent sniffing along this trail for prey would shortly be looking for new employment, however. One argument (I wasn’t going there but you asked) would be that these are job hunting costs (which are no longer deductible) paid as a taxable “perk” and/or there was an element of personal pleasure in the trips. Pretty nit-picky stuff, though.

    Slow day on the forum…

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #193308 Reply
    Liked by Peds
    Avatar Tim 
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    Quite honestly, IRS has goals and targets. We had a year round staff of five on the floor below my office. Requesting documentation, writing it up, and even assessing tax would be viewed as a complete waste of time. From the company standpoint, it’s clear. From an individual standpoint, if that’s all you got why isn’t this closed? Sorry, IRS examiners need to be productive too. It’s not a termination offense, but coworkers and superiors will tell the war stories bout it for years.
    Assessing tax on reimbursed travel. Did you hear the one Mack did in 2019? It wasn’t even to Vegas.

    #193345 Reply
    Avatar sk 
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    Status: Small Business Owner
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    I was reimbursed for job searching travel expenses by a prospective employer in my profession. No forms.

    This is apparently not a deductible expense any longer. Do I have to claim it as the reimbursement income on my 2019 income tax return, and pay tax on it?

     

    #220117 Reply
    jfoxcpacfp jfoxcpacfp 
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    I was reimbursed for job searching travel expenses by a prospective employer in my profession. No forms.

    This is apparently not a deductible expense any longer. Do I have to claim it as the reimbursement income on my 2019 income tax return, and pay tax on it?

    Click to expand…

    If this was a 2019 reimbursement, you won’t receive the 1099 until next January. If you were paid < $600, you will not receive a 1099. Either way, the reimbursement is taxable income.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #220120 Reply
    Avatar sk 
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    Status: Small Business Owner
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    Joined: 06/08/2019

    Is reimbursement taxable differently or as ordinary income?

    #220137 Reply
    Avatar wcinewbie 
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    Status: Physician
    Posts: 65
    Joined: 09/30/2017

    I interviewed with tpmg several years ago and they gave me a 1099 for the interview reimbursement.

    #220166 Reply

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