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The accountable plan is a policy within your company or your entity, which outlines how you reimburse yourself as an owner, employee, or shareholder-employee. And if you have team members within your business, the accountable plan is a good policy for them to get reimbursed for expenses as well.
One of the ways you get compensated for your business is wages, distributions, and expenses. And so, you’ve got to know which for what and an accountable plan is a great way to get reimbursed for those expenses. But first, let’s differentiate home office reimbursements from home office deductions. Yep! Those two are not the same.
The home office deduction is for the Schedule C filer, which is the sole proprietor or the single member LLC. The home office reimbursement, on the other hand, is a potential tax strategy that a corporation or partnership can use in their accountable plan. Specifically, the home office reimbursement is an expense report to reimburse the employee of a corporation or a partnership when using their home for business purposes.
Now, there's a process to determine accountable plan reimbursements for your home office. In this episode, we're going to walk you through what the process would look like when it comes to handling everything.
In this episode, you will hear:
- What is an accountable plan?
- Understanding the annual operating costs of the home
- Owning a home vs. renting a home
- Can home renovation costs be included in your reimbursement?
- Calibrating your real cost vs. budgeted cost
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