Tax Concepts

Accountable Plan

An accountable plan is a reimbursement arrangement that lets a business repay employees or owner-employees for qualifying business expenses without treating the reimbursement as taxable wages.

Quick answer

An accountable plan is a reimbursement arrangement that lets a business repay employees or owner-employees for qualifying business expenses without treating the reimbursement as taxable wages.

It matters because it can move valid expenses into the business in a cleaner way than mixing them into personal tax items.

An S-corp may reimburse a shareholder-employee for home office or mileage costs under an accountable plan.

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Plain-English Definition

What Accountable Plan means

An accountable plan is a reimbursement arrangement that lets a business repay employees or owner-employees for qualifying business expenses without treating the reimbursement as taxable wages.

Why it matters It matters because it can move valid expenses into the business in a cleaner way than mixing them into personal tax items.
Simple example An S-corp may reimburse a shareholder-employee for home office or mileage costs under an accountable plan.
Related Questions

Questions people ask about Accountable Plan

What does Accountable Plan mean?

An accountable plan is a reimbursement arrangement that lets a business repay employees or owner-employees for qualifying business expenses without treating the reimbursement as taxable wages.

Why does Accountable Plan matter?

It matters because it can move valid expenses into the business in a cleaner way than mixing them into personal tax items.

What is a simple example of Accountable Plan?

An S-corp may reimburse a shareholder-employee for home office or mileage costs under an accountable plan.

When should I ask a CPA about Accountable Plan?

Ask a CPA when the term affects your tax bill, estimated payments, deductions, or a planning move before year end.

How is Accountable Plan different from Home Office Deduction?

Accountable Plan means An accountable plan is a reimbursement arrangement that lets a business repay employees or owner-employees for qualifying business expenses without treating the reimbursement as taxable wages. Home Office Deduction means The home office deduction is a tax deduction for qualifying business use of part of a home. The difference is that they apply to different tax, accounting, or business situations and should not be treated as interchangeable.

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