The recent case of Stidham, TC Summ. Op. 2012-61, serves as an important reminder to employees filing Schedule A (business expenses) with their 1040 returns. You may not deduct business expenses that your employer "would have" reimbursed.
The U.S. Tax Court held that an employee could not deduct many business expenses on his tax return, such as the cost of overnight lodging, parking fees and meals. In this case these expenses would have been reimbursed by the employer, pursuant to the employer's internal policy. However, the employee missed the deadline to turn in these expenses, so he never sought reimbursement.
The court reasoned that the employer would have covered the costs, so the employee can't claim them as viable deductions on Schedule A.
Tulsa and Broken Arrow attorney Travis Watkins focuses his practice exclusively on solving tax problems and preventing future problems from occurring. Call Travis today at 918-877-2794 to get started.