Generally amounts paid as reimbursements to employees for travel, medical and other expenses are deductible by the Company and not income to the employees. However, tax rules require that such payments be made under an "accountable plan" that requires the employee to properly account for the expenses in order to obtain reimbursement. Failure to have such a plan could lead to the employees having to pay tax on the reimbursements and penalties and headaches to the Company. Contact us if you need assistance with your accountable plan.
General Rules: The law requires that you have a receipt, letter, or other written communication for the charity (showing the name of the charity, the date and the amount of the contribution) documenting all charitable contributions made in cash and that you have a receipt or a bank record (e.g. a cancelled check) documenting all contributions made by check or by other monetary means. For contributions of property, you generally need a receipt which contains the name of the charity, a description of the property, and the date and location of the contribution.
Contributions of $250 Or More: For all charitable contributions of $250 or more (in the form of cash, check, debit or credit card or property), the law requires a receipt (written acknowledgement) from the charity to which you made the donation stating the date and amount of the contribution as well as a statement as to whether you received anything in return for your contribution. If you received goods or services in return for the contribution, the receipt should include a description and an estimate of the value of the goods or services received in return for the contribution. If the goods or services received consist solely of intangible religious beliefs, the receipt should include a statement to that effect.
Contributions of Vehicles, Boats or Airplanes of More than $500: If you are claiming a deduction of more than $500 for a vehicle, a boat, or an airplane you contributed to charity, the law requires that you obtain a
Form 1098-C or other written acknowledgement containing the same information shown on Form 1098-C from the charity in order to deduct your contribution.
The law disallows an otherwise allowable deduction for any expense for traveling (including meals and lodging), entertainment, gifts, or listed property (e.g. passenger vehicles, computers) unless used exclusively at your place of business, unless the expense is substantiated by adequate records or by sufficient evidence corroborating your own statements.
In addition, the regulations generally require you to maintain documentary evidence (such as receipts, paid bills, etc.) for:
1) Any lodging expenditure.
2) Any other expenditure of $75 or more.
For business travel, the documentation should include the amount, date, place, and business purpose of the travel.
For business entertainment expenses, the documentation should include the amount, date, place, and business purpose of the entertainment as well as the business relationship of the person(s) entertained.
For business gifts, the documentation should include the amount, date, description of gift, business purpose of gift, and business relationship of recipient of the gift.
For listed property, the documentation should include the amount (e.g. cost), business or investment use based on mileage, etc., date of the expenditure, and business or investment purpose of the property.