Profit Tool is a field-proven tool reimbursement program authorized under Internal Revenue Code section 62(c), "Accountable Plan" rules. Profit Tool is designed to reduce employer payroll related expenses while increasing employee take home pay. For employees that must provide and maintain their own tools, such as automotive, marine, trucking, RV, motorcycles and aviation, the benefits for the employers and employees can be significant. Profit Tool Plan, Inc. is the administrator of the Profit Tool Product which enables participating employees to receive a separate tool reimbursement check, which is exempt from payroll taxes, in addition to their employment check. The sum of the two checks is greater than an employee's previous single paycheck. Profit Tool is fast becoming the industry standard because of their well documented and conservative accounting solution to the reimbursement methodology.

Smaller taxes and bigger paydays... the Profit Tool Way

In an economy when employers are searching for a proven way to reduce payroll related expenses, the Profit Tool way is the right plan for the job. Since 1988, tool reimbursement plans have provided companies an innovative method of controlling expenses in an extremely competitive environment. It is recognized and accepted as the industry standard that under current payment plans, all technicians that use their personal tools to perform their duties are being paid for the availability of their tools as part of their total compensation. Such a payment method is considered paid under a non-accountable plan. Profit Tool established a method of properly accounting for and separating the payment into an "accountable plan". The separation of time and skill from tools and equipment under the Profit Tool program, establishes a more accurate allocation for services and a reasonable reimbursement rate for employee business expenses. Because the tool reimbursement checks are not subject to taxation, the net results are an increase in the technician's take home pay. In addition, the company saves on the matching payroll related expenses. All this with ZERO out of pocket costs to the employer or the employee.

How Does an "Accountable Plan" Work
Under the Treasury Regulation 1.62-2(c)(1), a "reimbursement or other expense allowance arrangement" satisfies the requirements of Internal Revenue Code section 62(c), if it meets the following "three requirements";

1. Has a business connection

2. Is substantiated, and

3. Contains a provision requiring any excess payment to be returned

If an arrangement meets all three requirements, the regulations provide that all amounts paid under an "accountable plan". Under section 1.62-2(c)(4) of the regulations, amounts treated as paid under an "accountable plan" are excluded from the employee's wages, are not required to be reported on the employee's form W-2 and are exempt from withholding and employment taxes. The regulations further provide that if an arrangement does not satisfy one or more of the three requirements, all amounts are paid under a non-accountable plan, subject to all the proper withholding taxes.

Profit Tool Boosts Technicians Pay!

Employees looking for a more secure financial future will appreciate the many advantages that Profit Tool provides. Without Profit Tool, over 90% of those eligible to recover the cost of their tools, fail to do so. Many, because they just don't qualify. With Profit Tool, an employee can literally bank on their tools to legally reduce their taxes and immediately increase their take-home pay. This increase in take-home pay provides an employee with new opportunities to invest in additional tools and equipment, as well as in retirement savings plan, such as a 401(k). Profit Tool also furnishes employees with an on going, hassle free method of recovering the expense of any new tools they purchase. Enrollment couldn't be easier. A simple tool inventory sheet and enrollment form is all an employee needs to complete. Since the Profit Tool check is a reimbursement, similar to reimbursing an employee thirty six cents a mile for the use of their personal car, the tax treatment is simple: Do Nothing! The transaction is treated as a wash. There is no W-2 or 1099 forms ever issued.