Advertise here    

QuickBooks Forums      

Go Back   QuickBooks Forums > QuickBooks Software Support > QuickBooks Pro Forum

Thread Tools Rate Thread Display Modes
Old 09-05-2007, 05:59 PM
YogiWatcher YogiWatcher is offline
Registered User
Join Date: Sep 2005
Posts: 74
Recording reimbursable expenses & 1120S


I came across nice article on web that explains in details how to record reimbursable expenses in quickbooks. It also includes behind the scene working of Quickbooks.

This article talks about two methods:
  • The Expense Tab/Expense Account Method - Here expenses are reduced when reimbursed.
  • The Items Tab Method - Here expenses and income are tracked in two different accounts.
My question is what does IRS expect on form 1120S, line 1a (Gross receipts or sale). Does IRS expect us to include reimbursable expenses as income and then later also include it as deduction? Or is IRS happy if we just don't show reimbursable expenses anywhere under income or deduction?
Thanks and Regards

Yogi Watcher
Reply With Quote
Old 09-05-2007, 06:07 PM
suzannemead suzannemead is offline
Join Date: Nov 2003
Location: Woodbine, MD
Posts: 5,374
Reimbursed expenses is not shown as a sale. It would be other income, or a reduction of the expense accounts. You can't claim an expense without somehow showing the offsetting income or the reduction of the expense if you were paid back for it. I doubt it would matter to the IRS which way you do it as long as the bottom line is accurate for them to tax.
Suzanne M. - "Better Books"
Certified Quickbooks ProAdvisor in Pro.,Prem. & Enterprise /
Reply With Quote
Old 09-05-2007, 10:33 PM
YogiWatcher YogiWatcher is offline
Registered User
Join Date: Sep 2005
Posts: 74
Thanks Suzanne,

That's what I thought too, but had to confirm. Just to make sure that I understand correctly - I can EITHER show reimbursed expenses as other income and then also deduct them as expenses OR I can just reduce the expenses by the reimbursed amount and not show it as other income.

Now here is little twist - What if some of the reimbursed expenses are for meals when traveling to customer sites out of town.

If I show reimbursed meal expenses as other income then while deducting those meal expenses I get only 50% deduction for meals. But if I reduce my expenses by reimbursed meal expenses then essentially I get 100% deduction for meals. From this scenario it is better for me to reduce expenses (than to show as other income and then deduct it seperately).

Is this right? Does this make sense? How other people handle it?

Thanks for helping.
Thanks and Regards

Yogi Watcher
Reply With Quote
Old 09-06-2007, 06:24 AM
Joe Williams Joe Williams is offline
Registered User
Join Date: Jan 2006
Location: Oklahoma
Posts: 9,380
Be careful. Reimbursed expenses are expenses that you "pass" to the customer. The expenses are then claimed by them. If you use rembursed expenses for meals when traveling, then you should not claim any part of them on your income tax, you were "rembursed" for those expenses and you customer is claiming them as expenses on their taxes.
Joe Williams
Piedmont, Ok
Reply With Quote

Bookmark and Share
Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is Off
HTML code is On

Forum Jump

All times are GMT -5. The time now is 12:39 PM.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
All contents copyright (c) by AccountingUsers Inc.