Out-of-pocket expenses

From Wikipedia, the free encyclopedia

Out-of-pocket expenses are direct outlays of cash which are not reimbursed.

In operating a vehicle, gasoline, parking fees and tolls are considered out-of-pocket expenses for the trip. Insurance, oil changes, and interest are not, because the outlay of cash covers expenses accrued over a longer period of time.

The services rendered and other in-kind expenses are not considered out-of-pocket expenses, nor are depreciation of capital goods or depletion.

Organizations often reimburse out-of-pocket expenses incurred on their behalf, especially expenses incurred by employees on their employers' behalf. Out-of-pocket expenses for such things as charity, medical bills, and education may be deductions on federal income taxes, according to IRS regulations.