How much must Michael include in his gross income after being reimbursed for business dinner expenses?

When a taxpayer is reimbursed for business dinner expenses, the treatment of that reimbursement for tax purposes depends on the nature of the expenses and the arrangement regarding the reimbursement. If the reimbursement is made under an accountable plan, where the employee provides receipts and the expenses are legitimate, necessary and directly related to business activities, that reimbursement is not included in the employee's gross income.

In this scenario, if Michael is reimbursed under such a plan, he does not include the reimbursed amount in his gross income. This means that the amount received would not be taxable, allowing him to effectively deduct related expenses without them being counted as income.

In contrast, under a non-accountable plan, where the reimbursement may not be tied to specific expenses or receipts, the amount could be considered taxable income. However, as the correct answer indicates a $0.00 inclusion in gross income, it implies that the reimbursement Michael received meets the criteria of being part of an accountable plan, ensuring he has no tax liability on that reimbursement.

This delineation is important in tax planning; knowing when reimbursements affect income can significantly influence overall taxable income and strategies for minimizing taxes.