Simplifying Travel & Entertainment Rules & Recordkeeping

1. Introduction 
2. The Law 00:01:08
3. July 2025 Filing Updates 00:11:24
4. 1099-NEC 00:25:55
5. 1099-NEC - April 2025 Form 1099-NEC and 1099-MISC 00:34:51
6. Overview - Expense Reimbursement and Fringe Benefits 00:34:52
7. Overview - 1099/W-2 Reportable Payments 00:36:02
8. Overview - Taxable Wages VS. Reimbursements 00:36:19
9. Overview - Qualifying Fringe Benefits 00:49:01
10. Overview - Working Condition Fringes 01:07:00
11. Overview - De Minimis Fringes 01:07:28
12. Fringes and Reimbursements Issues –July 2025 Updates- IRC Section 274 Modifications 01:12:27
13. Accountable Plans 01:18:20
14. Accountable Plans - Rules For The Employee 01:19:22
15. Accountable Plans -  Rules For The Contractor 01:20:47
16. Watch Out For Sneaky Reimbursement Traps! 01:22:26
17. Fringe Benefit/Expense Reimbursement Record-Keeping - Record Detail 01:24:10
18. Fringe Benefit/Expense Reimbursement Record-Keeping - Expenses 01:24:31
19. Fringe Benefit/Expense Reimbursement Record-Keeping - Record Retention 01:25:24
20. Fringe Benefit/Expense Reimbursement Record-Keeping - Independent Contractors 01:29:50
21. Transportation Reimbursed Expenses 01:31:22
22. Transportation Reimbursed Expenses - Company Car And Executives 01:31:43
23. Other July 2025 Updates 01:33:01
24. Wrap-Up 01:36:09
25. Protect Yourself 01:37:17
26. Attendee Questions 01:37:49
27. Presentation Closing 01:41:16

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  Steven Mercatante

  Steven Mercatante is the principal and founder of TIR Consulting, LLC. He is a nationally recognized leader in tax reporting education and consulting on specialized compliance issues. He has conducted on-site consultation for corporate clients from across the world and led countless seminars and web [...]

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• Accountable Plan 00:05:42, 00:41:21, 00:50:54, 00:59:11, 01:05:49, 01:18:21, 01:19:25, 01:25:31
• Accounts Payable (AP)00:03:18
• Artificial Intelligence (AI) 00:08:53, 00:36:09
• Audit 00:01:51, 00:05:37
• B-Notice 00:01:51, 00:02:55
• Cents Per Mile Method 01:03:34
• CP-2100 00:02:23
• De Minimis 00:53:53, 01:07:30
• Due Diligence 00:18:51
• Expense 00:38:42, 00:42:25, 00:50:14, 00:52:29, 01:16:25
• Expense Reimbursement 00:05:50, 00:26:05, 00:36:29, 00:51:34, 01:05:41
• Fair Labor Standards Act (FLSA) 00:49:06
• Fair Market Value (FMV) 00:57:49
• Federal Income Tax (FIT) 01:01:05
• Federal Insurance Contributions Act (FICA) 00:48:54, 01:02:48
• Federal Unemployment Tax Act (FUTA) 00:48:56
• FIRE - File Information Returns Electronically 00:12:18
• Form 1042-S 00:22:20
• Form 1099-MISC 00:26:13
• Form 1099-NEC 00:21:38
• Form 8809 00:21:46, 00:22:08
• Form W-2 00:22:12, 00:31:13, 00:35:26, 00:48:50, 00:55:52, 00:57:11
• Fringe Benefit 00:05:39, 00:11:04, 00:26:06, 00:35:02, 00:45:53, 00:55:37, 01:01:09
• Golden Parachute Payments 00:27:13
• Independent Contractor 00:12:50, 00:48:00, 00:58:57,  01:20:47
• Information Returns Intake System (IRIS) 00:11:56, 00:13:00, 00:14:50, 00:19:14
• IRC Section 132 00:50:05
• IRC Section 274  01:12:27
• IRS Notice 972CG 00:01:58
• Minimum Wage 00:49:16
• Nonresident Alien (NRA) 001:22:41
• Overtime 00:30:15, 00:49:16
• Per Diem 00:38:18
• Resident Alien around 01:22:44
• S Corporation 00:55:19
• Shareholder 00:56:04
• Standard Mileage Rate 00:44:43
• Substantial Presence Test (SPT) 01:22:51
• Tariff 00:04:17
• Tax Cuts and Jobs Act 00:06:07, 01:12:47
• Tax Gap 00:03:26
• Tax Home 00:38:59, 00:40:29, 01:25:34
• TIN 00:17:20
• Transmitter Control Code (TCC) 00:13:26, 00:14:51
• Travel Expense 00:43:09
• Vendor 00:04:35, 00:12:48, 00:13:48, 00:18:46
• Wage 00:50:37, 00:58:00, 01:00:05, 01:09:44
• Working Condition Fringe Benefit 00:50:06, 01:04:26

Accountable Plan: An accountable plan is a plan that follows the Internal Revenue Service (IRS) regulations for reimbursing workers for business expenses in which reimbursement is not counted as income. ... However, these expenses must be business-related to fall under an accountable plan.

Artificial Intelligence (AI): Artificial intelligence is intelligence demonstrated by machines, as opposed to the natural intelligence displayed by humans or animals.

Audit: A formal examination of an organization's or individual's accounts or financial situation

B-Notice: A notice from the IRS stating that one or more tax ID numbers were missing from a 1099 or do not match the IRS records.

CP-2100: It is a notice that tells a payer that he or she may be responsible for backup withholding. It is accompanied by a listing of missing, incorrect, and/or not currently issued payee TINs. Largevolume filers will receive a CD or DVD data file CP2100, mid-size filers receive a paper CP2100, andsmall filers receive a paper CP2100A.

Cents Per Mile Method: This method is one of the simplest to calculate when personal use is involved. With the cents-per-mile method, fair market value of the employee's personal usage of the vehicle is determined simply by multiplying the number of personal miles driven by the IRS Standard Mileage Rate.

De Minimis: Too trivial or minor to merit consideration.

Due Diligence: Due diligence is a process or effort to collect and analyze information before making a decision or conducting a transaction so a party is not held legally liable for any loss or damage. The term applies to many situations but most notably to business transactions.

Expense: Offset (an item of expenditure) as an expense against taxable income.

Expense Reimbursement: Expense reimbursement is a method for paying employees back when they spend their own money on business-related expenses. These expenses generally occur when an employee is traveling for business but can occur in other work-related situations. (www.thebalancecareers.com)

FIRE - File Information Returns Electronically: The IRS FIRE system is the electronic network used to accept and process most types of filing forms. Technically, it stands for File Information Returns Electronically.

Fair Labor Standards Act (FLSA): The Fair Labor Standards Act of 1938 29 U.S.C. § 203 is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits most employment of minors in "oppressive child labor".

Fair Market Value (FMV): The term fair market value is used throughout the Internal Revenue Code among other federal statutory laws in the USA including Bankruptcy, many state laws, and several regulatory bodies. In litigation in many jurisdictions in the United States, the fair market value is determined at a hearing.

Federal Income Tax (FIT): Federal income tax is withheld from each W-2 employee’s paychecks throughout a tax year. FIT tax pays for federal expenses like defense, education, transportation, energy, and interest on the federal debt.

Federal Insurance Contributions Act (FICA): The Federal Insurance Contributions Act is a United States federal payroll contribution directed towards both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, people with disabilities, and children of deceased workers.

Federal Unemployment Tax Act (FUTA): The Federal Unemployment Tax Act (FUTA) is a federal law that imposes an unemployment tax on employers. The FUTA tax funds the federal government's oversight of each state's unemployment program. Only employers pay FUTA tax. You must deposit the tax quarterly and file an annual form.

Form 1042-S: Form 1042-S is used to report amounts paid to foreign persons (including persons presumed to be foreign) who are subject to income tax withholding. For an individual taxpayer, Form 1042-S is a document provided to you (and the IRS) by the payer of the income reported.

Form 1099-NEC: In the context of 1099 tax filing, NEC stands for “Nonemployee Compensation” (the first letters of the three words None, Employee and Compensation). Most tax payers recognize NEC as box 7 on Form 1099-MISC. NEC is used to report income paid to independent-contractors / the-self-employed (referred to as 1099 employees for simplification purposes). So, while employers report income that gets paid to employees on Box 1 (Wages, tips, other compensation) of the W2 form, payers report income that gets paid to none-employees on Box 7 (NEC) of the 1099-MISC form. As an individual, if you received form 1099-MISC instead of Form W-2 then the payer did not consider you an employee and did not withhold income tax or social security and Medicare tax.

Form 8809: Use Form 8809 to request an initial or additional extension of time to file only the forms shown on line 6 for the current tax year.

Form W-2: Form W-2 is an Internal Revenue Service tax form used in the United States to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. - Wikipedia (https://en.wikipedia.org/)

Fringe Benefits: An extra benefit supplementing an employee's salary, for example, a company car, subsidized meals, health insurance, etc.

Golden Parachute Payments: Golden parachute payments are payments of compensation made to individuals whose companies experience a change in control

IRC Section 132: Internal Revenue Code Section 132(a) provides eight types of fringe benefits that are excluded from gross income

IRC Section 274: Section 274(k) generally provides that no deduction is allowed for the expense of any food or beverages unless (A) such expense is not lavish or extravagant under the circumstances, and (B) the taxpayer (or an employee of the taxpayer) is present at the furnishing of such food or beverages.

IRS Notice 972CG: The IRS started mailing 972CG penalty notices in July 2013 regarding 1099's with missing or incorrect TIN/Name Combinations. A 972CG is a NOTICE OF PROPOSED CIVIL PENALTY. A simple way to prevent this costly penalty is to verify that your information is correct prior to filing.

Independent Contractor: An independent contractor is a person or entity contracted to perform work or provide services to another entity as a non-employee. As a result, independent contractors must pay their own Social Security and Medicare taxes. - Investopedia (https://www.investopedia.com/)

Information Returns Intake System (IRIS): The Information Returns Intake System (IRIS) Taxpayer Portal is a system that provides a no cost online. method for taxpayers to electronically file Form 1099 series. The Taxpayer Portal allows you to enter. data to create Forms 1099 by either keying in the information or uploading a .csv file.

Minimum Wage: The lowest wage paid or permitted to be paid specifically fixed by a legal authority or by contract as the least that may be paid either to employed persons generally or to a particular category of employed persons.

Overtime: Overtime is time and a half of what an employee earns for every hour worked over 40 in a workweek. The FLSA salary threshold is the minimum salary employers must pay employees for them to be exempt from overtime wages.

Per Diem: (Latin for "per day" or "for each day") or daily allowance is a specific amount of money an organization gives an individual, often an employee, per day to cover living expenses when traveling for work. - Wikipedia (https://en.wikipedia.org)

Resident Alien : A resident alien is a foreign person who is a permanent resident of the country in which he or she resides but does not have citizenship. To fall under this classification in the United States, a person needs to either have a current green card or have had one in the previous calendar year.

S Corporation: An S corporation, for United States federal income tax, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes.

Shareholder: A shareholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders may be referred to as members of a corporation.

Substantial Presence Test (SPT) : The Substantial Presence Test (SPT) is a criterion used by the Internal Revenue Service (IRS) in the United States to determine whether an individual who is not a citizen or lawful permanent resident in the recent past qualifies as a "resident for tax purposes" or a "nonresident for tax purposes"; it is a form of physical presence test. The SPT should be used in conjunction with the Green Card Test (the criterion that the individual possessed a valid Green Card at any time of the year). An individual who satisfies either one or both of these tests is treated as a resident for tax purposes.

TIN: A Taxpayer Identification Number is an identifying number used for tax purposes in the United States and in other countries under the Common Reporting Standard. In the United States, it is also known as a Tax Identification Number or Federal Taxpayer Identification Number.

Tariff: Tariffs are taxes imposed by one country on goods imported from another country. Tariffs are trade barriers that raise prices, reduce available quantities of goods and services for US businesses and consumers, and create an economic burden on foreign exporters.

Tax Cuts and Jobs Act: The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, Pub.L. 115–97, is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs Act, that amended the Internal Revenue Code of 1986.

Tax Gap: The gross tax gap is the difference between true tax liability for a given tax year and the amount that is paid on time. It is comprised of the nonfiling gap, the underreporting gap, and the underpayment (or remittance) gap.

Tax Home: A tax home is the general locality of an individual's primary place of work. It is the city or general vicinity where his or her primary place of business or employment is located, regardless of the location of the individual's residence.

Transmitter Control Code (TCC): The Transmitter Control Code (TCC) is an identifier that the IRS uses to distinguish different electronic filing companies. It's necessary when you need to file for a correction. Getting a TCC depends on how you file your 1099 forms

Travel Expense: Travel expenses are costs associated with traveling for the purpose of conducting business-related activities. Travel expenses can generally be deducted by employees as non-reimbursed costs incurred while traveling away from home specifically for business purposes.

Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.

Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.

Working Condition Fringe Benefit: The working condition benefit is a type of fringe benefit employers offer employees. Working condition benefits include property and services employers provide to employees so they can perform their jobs.