Husband and wife have an S-corporation they run from their home (300 sq ft out of 3000 sq ft home). Is there any way to take a deduction on the S-corp?
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Yep. The employee/shareholder can fill out a 8829 every month and use that for the monthly reimbursement under an Accountable Plan.
Unfortunately, it is too late to do much for 2021 now, because Accountable Plan reimbursements need to be done on a timely basis.
The employee would submit an accountable expense report, the employer would reimburse for those costs, and the corporation thereby has expenses incurred to report.
Expenses submitted would be similar to those in Form 8829? How about the depreciation portion?
Yep. The employee/shareholder can fill out a 8829 every month and use that for the monthly reimbursement under an Accountable Plan.
Unfortunately, it is too late to do much for 2021 now, because Accountable Plan reimbursements need to be done on a timely basis.
The posts about an accountable plan are correct. The technical issue I had with the IRS under audit is whether there was an accountable plan signed plan document under Reg. 1.62-2. The act of reimbursing is not the same as the company having an accountable plan. There are many templates online for free. Every business client we have should have a signed plan document. Without it, the IRS may or may not accept the action of reimbursement.
Here is a sample below.
ABC Company, Inc. (the Company)
ABC Company, Inc. desires to establish an expense reimbursement policy pursuant to Reg. 1.62-2, upon the following terms and conditions:
Notwithstanding any term or condition in Part I of this document, the following persons, expenses, or arrangements are not considered to be covered under this accountable plan and are subject to terms and conditions of a separate expense reimbursement policy:
Company officer: Date:
[1] Must be 60 days or less after the expense is pair or incurred if the company wants to qualify for the “fixed date” safe harbor substantiation rule.
[2] Must be 120 days or less after the expense is pair or incurred if the company wants to qualify for the “fixed date” safe harbor substantiation rule.
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