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Income clarification

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C

coffeeguy

Guest
What is the name of your state? Michigan

I just received my W-2 from a former employer who fired me. We parted on not-so-nice terms as his business practice is highly unethical and somewhat illegal.
I was surprised to see the total wages he claims that I earned while employed by him. I question some of what he claims as income, as my figures and his differ substantially.
What is considered as income-

Car allowance?
Business expense reimbursement?
Mileage paid at .20 per mile?

I figure that car allowance is considered income, but wasn't sure about reimbursement for actual cost of business expense. (Hotels, telephone, products for use during business, etc.)
If I do find a legitimate discrepency, what steps do I take to get a corrected W-2 from this employer.
Thanks for any advice.
c-guy
 


abezon

Senior Member
If an employer reimburses an employee under an accountable plan, the reimbursements are not included in the employee's income & the employee can't take a deduction for the expenses. An accountable plan requires the employee to substantiate the expenses to the employer within a reasonable time, return any excess reimbursements, and can only reimburse business expenses. The employer decides whether to use an accountable plan or not. The employee cannot convert a non-accountable plan to an accountable plan by substantiating the expenses voluntarily. A car allowance is non-accountable; mileage & actual expenbse reimbursements may be accountable.

However, if the employer paid everyone else using an accountable plan & put you on a non-accountable plan out of spite, you can probably sue for discrimination. You'll need to talk to your former coworkers and/or a lawyer.
 
C

coffeeguy

Guest
Thanks for the input.
So since I filled out weekly business expense reports (hotel, phone, business meals) and only received the actual amount of the expenses, then this would be considered accountable, and thus not reported as wages?
And, my car allowance was a flat fee paid monthly, and was higher than my actual car payment, then this would be considered income?
I also received a mileage reimbursement at 20 cents per mile. So this would be considered as income, but I claim the difference versus the standard mileage deducation?

I think the only problem is that he added my weekly reimbursed actual business expenses as income in box 1.

Am I on the right track here??
Thank you
 

abezon

Senior Member
Yes, you're on the right track. However, just because the employer's actions are consistent with an accountable plan doesn't mean it is an accountable plan. The employer can just not bother to say it's an accountable plan and include all reimbursements in income. If that's what happened, your only hope to force him to correct the W-2 is if he did not include the reimbursements in other workers' W-2s. Then you have a discrimination claim.
 

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