#accountable-plan
IRS accountable plans for reimbursing owners and employees tax-free under Treasury Regulation 1.62-2, including the business connection, substantiation, and return-of-excess rules, plus mileage, home office, and supply reimbursements for S corporations and small businesses
Reimbursements stay tax-free under IRS rules only with 60-day substantiation and 120-day return of excess advances — miss either and they become W-2 wages.
IRS accountable plans need a business connection, substantiation within 60 days, and excess advances back in 120 — miss one and reimbursements become W-2 wages.
Day trips are never business travel under the IRS sleep-or-rest rule: same-day meals are nondeductible and day-trip per diems are taxable wages.
California and Illinois require reimbursement of work-required phone use, even on unlimited plans — here is how to set a defensible monthly stipend.
If an employee crashes their own car on a work errand, your business can be sued. HNOA covers that liability gap — what it covers, excludes and costs.
IRS Notice 2026-60 lifts high-low per diem to $329 high-cost and $230 elsewhere from Oct 1, 2026; meal rates stay $86/$74. Update your accountable plan now.
Your spouse's travel is deductible only if they are your employee on a bona fide business trip — otherwise the IRS treats employer-paid costs as W-2 wages.
FAVR pays drivers tax-free with a fixed monthly allowance plus a per-mile rate — but it needs five drivers, 5,000 miles each, and a quarterly IRS ceiling test.
GSA's FY2027 standard per diem is $181/day — $113 lodging plus $68 M&IE from October 1. Update your accountable plan or the IRS taxes them as wages.
Employer cell phones are tax-free with no call logs under IRS Notice 2011-72 if provided for business reasons; internet needs an accountable plan and receipts.
Volunteer firefighters and EMTs are usually employees for federal tax purposes, so stipends and per-call pay are W-2 wages. Section 139B excludes up to $50 for each month of service ($600 a year) plus qualified state and local tax benefits; LOSAP awards accrue tax-deferred under an $8,000 cap for 2026 and are taxed as ordinary income on payout with no FICA; only accountable-plan reimbursements stay off the W-2.
Bringing staff back on-site changes payroll tax, benefits, and deductions at once. For 2026 the Section 132(f) exclusions are $340/month each for transit/vanpool and qualified parking, saving employers about 7.65% of every pre-tax dollar; W-2 employees can no longer deduct home-office costs, so route equipment through an accountable plan instead.
