We specialize in helping clients clarify their taxes so they keep more of their money. Many small business owners who come to see us in Fort Worth, TX are generally unaware of even the basic tax saving strategies. Setting up an accountable plan is one of the best methods for a shareholder to get cash out of their corporation. S corporation can set up an accountable plan so that the shareholder will receive tax-free reimbursements while the same expenses are deductible to the S corporation.
An accountable plan must meet three requirements to pass IRS muster:
- The expenses must have a business connection.
- There must be substantiation to support the deduction.
- Any excess reimbursements over actual expenses must be repaid promptly.