You buy an airline ticket between your home and your domicile with some extra bank $$. You check "yes" to the commuting question on the expense report so that expense will go into your taxable income. However, you end up short of travel funds and have to pay for half the airline ticket.

So, you're paying taxes on the whole ticket but you're also eating half the cost of the same ticket with a payroll deduction.

If you owed on the whole ticket, you could just not check the box for that expense since you're buying it, not Fedex. I'm curious how folks are handling the partial expenses.

Alder, the way I do it is that if I'm spending 1c of the Company money, I check the "yes" box and advise my tax guy at the end of the year how much out of pocket money I've spent. If I'm buying the ticket, using all of MY money, I check "no".
fbh

Don't know for sure, but I was once told any payroll deduction for shortage of bank came out pre-tax. Does that make it simpler or more complicated?

I just assumed that it is a commuting expense because I don't live in domicile and is not deductible. Just like a commute to Memphis for training. Now those of you with second jobs might be able to claim something, but it gives me a headache thinking about it.

Payroll deductions for travel bank shortage are not pre-tax. If they were, they would look like our 401K and Healthcare spending account deductions and have a "&" to the left of "DevBank" under Deductions on our earnings statement.

Lag, this isn't a deductibility question - I know a commute to domicile for a trip or training isn't a deductible business expense. Since we got the "yes/no" check box on the expense report, we're now required to report any commuting expenses Fedex pays on our behalf as taxable income.

If you check the "yes" box on a $200 airline ticket to MEM, you're going to end up paying $56 to the IRS (assuming 28% bracket). That $56 is going to be part of the money deducted from your paycheck under Fed Withholding. If you end up having to cover $100 of that expense with your own money via payroll deduction, then you've been over-charged on your taxes by $28.

I was just wondering if there was a way to handle this situation effectively during the submission of the expense report or are most people just taking care of the discrepancy during the filing process.

Q: Have you actually done the math and been charged on out of pocket funds as in your example?

The reason I ask, is that years ago when this new procedure came into being I asked the same question of the Company and I recall the answer was that they deduct all non taxable expenses from the bank first and then the taxable, and if their is a bank overage then the imputed taxes are only applied to the amount actually covered by Company money.

You're correct. Thanks and I'm sorry for stirring up a non-issue.

I got a bit mixed up due to the 2-ish month delay in expense report submission versus related action in the paycheck(resulting in last year's Nov/Dec events being taxed this year). Also, it appears that the taxable expense may be applied in one paycheck and the related deduction taken from another.

No wonder why my tax guy looks at me funny when I tell him that.
Thank you, all, for the clarification.
fbh