S Corporation Home Office Reimbursement

However i m wondering if the s corp can just reimburse me using the safe harbor method 5 per square foot up to 300 square feet. Employees then regularly say monthly request reimbursement for business expenses including home office expenses. Might not be worth it.

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I own an s corp and my home office qualifies for the home office deduction.

S corporation home office reimbursement. Accountable plan for s corporation deductions and reimbursements the third option being reimbursed under an accountable plan provides the greatest tax savings. Reimbursement under an accountable plan. I have a reimbursement plan set up with the s corp than includes a small percentage of my mortgage interest internet hoa dues etc. S corp home office deductions can be accomplished on your own.

If your entire home was 1 500 square feet you would divide 100 by 1 500. Many taxpayers have trouble with this area and they fear that such deductions could trigger an irs audit. Other stuff to remember about s corps home office yes you can. The advantage of renting your home office to the s corporation is that it reduces the net income of the s corporation thus reducing the reasonable salary threshold giving you some savings on the self employment tax.

The s corporation can pay you for the costs of a home office under an accountable plan for employee business expense reimbursement. S corporation expenses. But where the home office has a ton of weight is now your commute is from the bedroom to the basement or den and all travel from your home office is business travel. For business owners who restructured their businesses as an s corp a home office deduction can get complicated and many avoid doing so entirely.

The s corporation s deduction of the home office expenses was disallowed because the s corporation had reported net losses for the years under review. Why home office deductions. 2106 expenses paid directly by shareholders reimbursement policy capital contribution. Simple s corporation home office deduction example.

But all was not lost because expenses disallowed due to the income limitation would carry over to subsequent years and could be deducted to the extent of s corporation net income in those years. The s corporation pays those business expenses carefully applying the rules of the accountable plan reimbursement arrangement. So a home office reimbursement as a business deduction might put 75 to 200 in your pocket. So if your home office was a 10 10 room the square footage of would be 100.

Here is another consideration. By being careful in how you structure the relationship between yourself and your s corporation there s a way you can benefit from the expenses of having a home office. In this case you would get to deduct 6 7 of your home office expenses by multiplying that percentage by eligible home expenses like mortgage interest or monthly rent utilities interest and.