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127: REPLAY: Using An Accountable Plan To Create Tax-Free Reimbursements
Manage episode 358611595 series 2794943
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If you're a small business owner with employees and you still don’t have an accountable plan, then now is the time to start thinking about it. In this episode, we're diving into using an accountable plan to create tax-free reimbursements – in a legal way.
Every decision is a profit decision, and profit is measured in time, energy, and money, and that especially happens around your tax, your tax strategies, and your policies. And if you’re able to hit all three, this means more pay, play, and profit for you and your business!
Basically, an accountable plan is a policy around how you're going to be reimbursed for expenses inside your business. One of the biggest reasons why you want an accountable plan in place is reduced taxable income and self-employment tax for the owner or the shareholder. It also allows the reimbursement to be excluded from taxable income for employees.
An accountable plan is absolutely legal. If you're ever audited, then you have nothing to fear because then you've got all the structure in place.
In this episode, you will hear:
Accountable plan of a business owner vs. shareholder
Why consider an accountable plan
Entity types that can benefit from an accountable plan
Assumptions made and three rules when setting up an accountable plan
Pros and cons of an accountable plan
Other considerations (ex. meal deduction, home office expense, codes)
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If you like this podcast and are thinking of creating your own, consider talking to my producer, Emerald City Productions. They helped me grow and produce the podcast you are listening to right now. Find out more at https://emeraldcitypro.com Let them know we sent you.
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