W-2...Box 14 "UNACT"?

[AZ-Tax]

Ever seen this before, the only option I see it can be is a "Charitable cash contribution" or "other" not classified. Any help would be appreciated.

TP emailed me, its "my per diem".

[Koss]

Per diem

Taxable Per Diem included in Box, 1, 3, 5, and 16.

Check this out, way down at the bottom, under Box 14:

http://gao.az.gov/publications/payrollreport/W-2_EXPLANATION-2011.pdf

No action required. It's reimbursement of employee business expenses.

UNACT = unaccountable plan. The reimbursement is fully taxable. Already included in the wages in Box 1.

Do nothing.

BMK

[AZ-Tax]

Thanks Koss....

Thanks Koss

[Koss]

Unact

You probably don't wanna know where I got that link LMAO

BMK

[joanmcq]

If it's fully includable in taxable wages, the expenses are deductible as EBE. I'm just in the process of telling a new client he can deduct auto expenses & cell phone since he's given a fully taxable allowance to use his own car & cell.

[Koss]

Deductible Expenses

If it's fully includable in taxable wages, the expenses are deductible as EBE.

I agree. But the amount included in wages is a per diem flat rate of some sort. It's a non-accountable plan. The employee gets this money regardless of what the actual expenses are. If the "reimbursement" is greater than his expenses, then he gets to keep the difference. If his expenses are greater than the reimbursement, he doesn't get any additional reimbursement. There's a complete disconnect.

My point is simply that whatever employee business expenses he has should be documented with receipts, or a journal, or whatever. You cannot assume that the amount in Box 14 is equal to his employee business expenses.

You can't do anything with the amount in Box 14.

You just prepare Schedule A, and Form 2106, as you normally would, using whatever data the employee can provide. The amount in Box 14 cannot be used to substantiate business expenses if it is a non-accountable plan.

BMK

[joanmcq]

Oh, I know this. I'm getting my guy on board to keep a mileage log for 2012, and keep track of the gas charges his company pays for.

The nice thing about the box 14 is it does give you a heads up that there is a nonaccountable plan. I'd have never known about this one except I asked for paystubs to do a community/separate income split (RDP'd in 2011), and saw the inclusions in income-there was no breakdown of income on the W-2 like his husband's had, which alerted me to look for RSUs included in pay.

[AZ-Tax]

Way to high of AGI for 2106 deduction

My client has a way to high AGI for any 2106 exps plus other exps that fall into the "job exps and certain misc deductions" to be deductible on Sch A.

[FEDUKE404]

When the dust has settled

My client has a way to high AGI for any 2106 exps plus other exps that fall into the "job exps and certain misc deductions" to be deductible on Sch A.

Sounds like he just got a taxable raise....

This discussion is not that distant from recent ones about generous employers who pay a large amount for employee moving expenses. Just because the employer "paid" something does not necessarily mean all/some is automatically deductible on the tax return.

FE