How to Get Reimbursed for Expenses (4 steps)
1. Determine What is Considered an “Expense”
Expenses that are typically eligible for reimbursement include:
- Advertising — Costs attributed to the advertising of the business or employee’s activities
- Office Supplies — Such as pens, paper, and printer cartridges
- Repairs and Maintenance — For machinery or utilities used by the business
- Taxes — Such as tolls and sales taxes
- Travel — Lodging, entertainment, meals, and renting vehicles
- Utilities — Such as cell phone bills and software subscriptions
A full list of expense categories recognized by the IRS is available on Form 1040 (Schedule C) Part II. Although the IRS allows companies to expense these categories, this does not guarantee that the company will reimburse the employee.
2. Keep Your Receipts
Under IRS rules, all expense reports and associated receipts should be maintained for three years. Therefore, a physical receipt is required for all expenses that are paid in cash. If the employee has submitted the necessary receipts and paperwork to the company then they will be responsible for providing them to the IRS if an audit is pursued.
Employers usually require documentation of reimbursement claims, so receipts for allowable purchases should be saved and submitted with the reimbursement form. Though it may not be possible to prove mileage, gas, and toll receipts are usually good enough. If driving a significant distance, you may also print and submit directions from an online mapping site such as Google Maps to verify the distance traveled. Note that the IRS sets standard mileage reimbursement rates.
All hope is not lost if you’ve discarded receipts. Most banks make records of credit or debit card activity available online. Log into your online banking site and check the account activity section to find electronic records of purchases.
3. Categorize Your Expenses
Use the employee reimbursement form to properly categorize the expenses. It’s important to provide as much detail as possible, including:
- Date
- Payment method
- Purpose
- Description
Calculate the grand total and submit it directly to the employer or to the respective department.