Lock in Your Home-Office Deduction in Your S Corp

April 5th, 2017 at 8:01 AM

05 Apr Lock in Your Home-Office Deduction in Your S Corp

If you operate your business as an S Corporation, you will need to follow the accountable plan rules to lock in your home office deductions.

The accountable plan  or reimbursement method is essentially an expense report that must be submitted to your corporation. Other ways to trying to establish this valuable tax deduction will be invalid; such as the rent strategy and attempting to claim the deduction as an employee expense.Therefore, there is ONLY one right way to benefit from the home-office deduction for your S Corporation.

Under Section 1.62-2(c) the IRS provides the road map. Requirements are:

1. Proof of the expense
2. Proof of regular use
3. Proof of business use
4. Proof that the use of the home office is for the convenience of your S Corporation
5. Proof of exclusive use

This is an extremely valuable tax deduction for your Corporation—IF you follow the rules the IRS provides.