The Tax Cuts and Jobs Act of 2017 suspended employee deduction of work related expenses on their personal returns, for 2018 through 2025. However, veterinary practices CAN deduct reimbursed business expenses using an accountable plan.
To stay competitive in compensation and benefit offerings, veterinary employers should review their policies and ascertain what they must do, what they can do, and how to protect valid business deductions related to employee reimbursement.
All veterinary practice employers should establish written accountable plans for employee reimbursements, including for practice-related use of a personally-owned vehicle and personal devices like cell phones.
An accountable plan satisfies three basic requirements: the expense has a business connection, the expense is substantiated, and any excess allowance amounts are repaid to the employer. The federal regulations do not require that the plan be in writing; however, the employer must be able to prove it has defined requirements for employee reimbursement and understands the regulatory limitations. Thus, the employer is well-advised to have the plan in writing. The employer should also keep good records of all reimbursement transactions.
Here is an example of a written plan.