They paid, now should I?
October 13, 2009 6:51 PM Subscribe
Can I expense these plane tickets or should I pay for them myself?
I traveled to a conference tangentially related to my job to give a speech to the attendees. The organizers paid for my hotel room and offered meals as part of the conference.
I combined the trip to the conference with a trip to one of our corporate offices that was in a nearby city as I was due to visit that office anyway, and it made the most of a cross-country trip, while adding only a tiny amount in additional fees for the short hop flight between the two.
The airline tickets were not covered by the conference, but I planned to expense them since a) it was my boss who suggested I attend the conference and b) the trip involved the office visit, as well.
Upon opening the thank you card from the conference organizers, I discovered an unexpected and quite large honorarium. It would cover my airfare 4 times over.
So, should I use the honorarium to pay for the plane tickets? Expense them anyway?
I have a feeling there's a 'Duh' answer to this question, but I can't figure out if it's 'Duh, of course your company will pay for the plane tickets, they sent you to the conference, and the honorarium is for you, you, you!' or 'Duh, it would be totally unethical for you to expect your employer to pay for your plane tickets, that's what the honorarium is for!' because I've never done anything like this before. If the answer is 'ask your boss', I'll do that, but if there's a totally 'duh' answer, I don't want to look like an idiot by asking.
I traveled to a conference tangentially related to my job to give a speech to the attendees. The organizers paid for my hotel room and offered meals as part of the conference.
I combined the trip to the conference with a trip to one of our corporate offices that was in a nearby city as I was due to visit that office anyway, and it made the most of a cross-country trip, while adding only a tiny amount in additional fees for the short hop flight between the two.
The airline tickets were not covered by the conference, but I planned to expense them since a) it was my boss who suggested I attend the conference and b) the trip involved the office visit, as well.
Upon opening the thank you card from the conference organizers, I discovered an unexpected and quite large honorarium. It would cover my airfare 4 times over.
So, should I use the honorarium to pay for the plane tickets? Expense them anyway?
I have a feeling there's a 'Duh' answer to this question, but I can't figure out if it's 'Duh, of course your company will pay for the plane tickets, they sent you to the conference, and the honorarium is for you, you, you!' or 'Duh, it would be totally unethical for you to expect your employer to pay for your plane tickets, that's what the honorarium is for!' because I've never done anything like this before. If the answer is 'ask your boss', I'll do that, but if there's a totally 'duh' answer, I don't want to look like an idiot by asking.
First of all, you would expense the tickets either way. They are a legitimate business expense for all the reasons you claim and are in no way suspect. Your business should have picked it up whether or not you got an honorarium.
Second, the honorarium issue is probably covered in your organization's HR manual. If you don't think you have one, you might anyway, through your payroll company. Ask the HR person if you can have a look. In most cases there is a section covering outside consulting, speaking fees, honoraria, appearances, etc., and it will describe what you're supposed to do with funds received while speaking on the company's behalf.
Did you fill out a W-9? If so, the honorarium will show up on your taxes as additional wages. Plan for that.
posted by Miko at 7:02 PM on October 13, 2009
Second, the honorarium issue is probably covered in your organization's HR manual. If you don't think you have one, you might anyway, through your payroll company. Ask the HR person if you can have a look. In most cases there is a section covering outside consulting, speaking fees, honoraria, appearances, etc., and it will describe what you're supposed to do with funds received while speaking on the company's behalf.
Did you fill out a W-9? If so, the honorarium will show up on your taxes as additional wages. Plan for that.
posted by Miko at 7:02 PM on October 13, 2009
P.S. I still think the upshot is that you should claim it; you performed the service. But it's really likely your company's policy will spell out what's permitted, officially.
posted by Miko at 7:03 PM on October 13, 2009 [1 favorite]
posted by Miko at 7:03 PM on October 13, 2009 [1 favorite]
I don't think there's a "duh" answer to this. The first thing is to decide whether the conference was business-related. If yes, the tickets are a valid business expense but then there's the tricky question of who gets the honorarium. If you decide it's not, then you get into tricky IRS definitions like whether the trip was "primarily for business".
posted by smackfu at 7:13 PM on October 13, 2009
posted by smackfu at 7:13 PM on October 13, 2009
Yep. The money is for you. You're boss suggested you go, and you tended to business related stuff. That's what expense accounts are for.
Don't feel guilty. You earned it.
posted by Lutoslawski at 7:24 PM on October 13, 2009
Don't feel guilty. You earned it.
posted by Lutoslawski at 7:24 PM on October 13, 2009
My company has a strict ethics policy and we employees are not allowed to accept gifts of any real value. Your company's HR policies will vary. Ask for HR for guidance on the honorarium issue. If accepting the gift doesn't put you into any potential conflicts of interest accepting it should be OK. The plane tickets are a business expense and should be expensed.
posted by prunes at 7:41 PM on October 13, 2009
posted by prunes at 7:41 PM on October 13, 2009
Not an HR person, but I agree you keep the honorarium, unless (as prunes says) specifically forbidden by company policy. It's to honor your contribution to the event, not to reimburse your travel.
posted by lakeroon at 8:35 PM on October 13, 2009
posted by lakeroon at 8:35 PM on October 13, 2009
Having worked for Fortune 50 companies where honorariums are standard practice for speakers, here's how those companies treated it (YMMV).
All expenses that would generally be expense items, are expensed; i.e., travel, etc, especially if during the travel the employee were to visit satellite offices or otherwise perform work related tasks. Remember that if they do ask you to pay for the airfare, which is unlikely, to keep receipts, as you can expense it on your taxes. Not 100% any more, but still...something is better than nothing.
Honorariums are not considered as gifts to an employee, but instead are treated as payment in lieu of services rendered, and are retained by the employee. It is assumed that you spent personal time preparing materials, practicing speeches, etc outside of business hours, and therefore they are considered the same as "external consulting fees" and are not considered something that should be remitted back to the company. Also, there are tax considerations which are problematic if they force you to remit.
That said; you will have to claim those fees as income on your taxes and you may or may not get a 1099 from the organization which sent the speaker fee. If it was not a pre-negotiated fee, and you didn't give them an SS#, then it will be your responsibility to remember to put it on your 1040, they won't send you a 1099. However, even if they don't send you a 1099, they will have a record of it that will be part of their IRS filings...and the IRS combs those filings looking for people who don't claim income from honorariums. Just FYI.
Because honorariums are generally considered income by the IRS, and you will have to pay taxes on them, most corporations do not want to get in to the tax hassle of reimbursing you for taxes paid on money that they force you to remit to them. It's a really tricky tax situation if they force you to give them the fee, unless they then cut you a check for the same amount. It's easier all the way around if they let you keep it, and pay taxes on it.
If they do force you to remit, you're going to need an accountant to figure out how to get you out of paying income tax on the money you remitted. It's not an easy write-off and requires some pretty weird documents of proof. You can expense the accountant usually, but it may cost more than the fee received...it's really a tax nightmare on both sides, which is why most companies don't do it.
posted by Peecabu at 6:08 AM on October 14, 2009 [1 favorite]
All expenses that would generally be expense items, are expensed; i.e., travel, etc, especially if during the travel the employee were to visit satellite offices or otherwise perform work related tasks. Remember that if they do ask you to pay for the airfare, which is unlikely, to keep receipts, as you can expense it on your taxes. Not 100% any more, but still...something is better than nothing.
Honorariums are not considered as gifts to an employee, but instead are treated as payment in lieu of services rendered, and are retained by the employee. It is assumed that you spent personal time preparing materials, practicing speeches, etc outside of business hours, and therefore they are considered the same as "external consulting fees" and are not considered something that should be remitted back to the company. Also, there are tax considerations which are problematic if they force you to remit.
That said; you will have to claim those fees as income on your taxes and you may or may not get a 1099 from the organization which sent the speaker fee. If it was not a pre-negotiated fee, and you didn't give them an SS#, then it will be your responsibility to remember to put it on your 1040, they won't send you a 1099. However, even if they don't send you a 1099, they will have a record of it that will be part of their IRS filings...and the IRS combs those filings looking for people who don't claim income from honorariums. Just FYI.
Because honorariums are generally considered income by the IRS, and you will have to pay taxes on them, most corporations do not want to get in to the tax hassle of reimbursing you for taxes paid on money that they force you to remit to them. It's a really tricky tax situation if they force you to give them the fee, unless they then cut you a check for the same amount. It's easier all the way around if they let you keep it, and pay taxes on it.
If they do force you to remit, you're going to need an accountant to figure out how to get you out of paying income tax on the money you remitted. It's not an easy write-off and requires some pretty weird documents of proof. You can expense the accountant usually, but it may cost more than the fee received...it's really a tax nightmare on both sides, which is why most companies don't do it.
posted by Peecabu at 6:08 AM on October 14, 2009 [1 favorite]
follow-up from the OP
Thanks, everyone, for your help. After a month of internal debate, HR has decided that my honorarium is actually their revenue, and asked that the cheque be signed over to them, thus rendering this question moot.posted by jessamyn at 8:21 AM on November 20, 2009
I don't think the tax problems will really arise since I don't live or work in the country where the honorarium was issued, and I doubt that income will follow me across a border, even if it should. No tax forms were issued with the cheque, nor would the organization that issued it have the information they need to do so (they have nothing more than my name and email address).
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posted by june made him a gemini at 6:59 PM on October 13, 2009