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2nd job: commuting or reimbursable expense?

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in Office Management,Payroll Management,Small Business Tax

Q: An employee has taken a second job with our company on a part-time basis. Would our reimbursement of his travel expenses from his first job to our workplace be a tax-free reimbursement, or a taxable commuting expense?

A: Under tax code Section 162, taxpayers can deduct their travel expenses to a second job on their 1040s, so you may consider those expenses working-condition fringe benefits and reimburse him tax-free.

Caveat No. 1: The employee must substantiate his travel expenses under the accountable plan rules.

Caveat No. 2: The employee must go directly from his first job to his second job with you; any detour invalidates the tax-free reimbursement.

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