Deductions and Write-Offs

Accountable Plan

Asked Thursday, July 02, 2026 by Savta

I am an S Corp Midwifery practice. I spend 96 hours a quarter training an apprentice who is from an underserved population. I do not get paid for this service. At a basic fee of $25/hour this is $2400/quarter. Can this be used on the accountable plan as out of pocket expenses?

Quick Answer:

No. Under IRS regulations, you cannot deduct the value of your own time or services as an expense, nor can it be reimbursed through an accountable plan. An accountable plan is strictly for reimbursin...

Deductions and Write-Offs

Home Office Deduction and Reimbursement Structure for Manager-Managed Partnership LLC

Asked Monday, June 15, 2026 by May

We are a manager-managed LLC taxed as a partnership. Managers are required to maintain a home office so which is the better approach: 1. LLC reimburses managers for home office expenses and deducts them as business expenses. 2. No reimbursement; managers claim home office deductions on their personal tax returns. Can managers report reimbursements as non-taxable? How are mortgage interest and property taxes treated if reimbursed? Which option is more compliant and tax-efficient?

Quick Answer:

Option 1 (Reimbursement via an **Accountable Plan**) is generally the more compliant and tax-efficient approach. **Why Option 1 is better:** Under an Accountable Plan, the LLC deducts the reimburseme...

Deductions and Write-Offs

How to distribute and claim tip tax exemption?

Asked Wednesday, May 27, 2026 by Ashley

We own a mom & pop business, an LLC, IRS treats as a partnership of my wife and me, no paid employees. Our income is as owners draw as needed from net profits. My question is about reporting of $15,000 tip income, which is not distributed to us, just left in income. If we pay the tips to us and report as income, which is now exempt up to $25k, do we need to issue 1099s to each partner? Or can we just transfer the tip income into owner's equity. If so, how can we claim the tip tax deduction?

Quick Answer:

Based on current tax law, there is **no federal tax exemption** for tips up to $25,000. While this has been a topic of political discussion, it is not currently law. In a partnership (LLC), "Owner’s...

Deductions and Write-Offs

accountable Plan

Asked Saturday, May 23, 2026 by Cherilee

I have an S Corp and provide midwifery and health care services. I spend 6 hours a week training an apprentice for which I do not get paid. Can this be included in the Accountable Plan?

Quick Answer:

No, you cannot include the value of your time or "unpaid" training hours in an Accountable Plan. An Accountable Plan is designed to reimburse employees for actual, out-of-pocket expenses incurred on...

Deductions and Write-Offs

Tax Deductions and Charitable Tryst

Asked Friday, May 22, 2026 by John

My father set up a charitable trust to donate funds to three schools. The trust was funded by a life insurance policy; the trust was beneficiary. The insurance policy turned out to be a second to die policy that did not pay out until my step-mother died five years later; so after my father died and the trust terminated, I made myself the beneficiary. When I received the funds, I gave the schools what they should have received. Can I deduct the contribution on my personal tax return?

Quick Answer:

Whether you can deduct these payments depends on the legal ownership of the funds at the time of the transfer. Under IRS rules, you can generally only deduct charitable contributions made from your o...

Deductions and Write-Offs

Office expense

Asked Tuesday, May 19, 2026 by Cherilee

I have an S Corp home office that occupies 67% of my home. I see clients in my home. I purchased 2 small air purifiers for that space. Is this considered a business expense or a household expense

Quick Answer:

Since the air purifiers are used in a space specifically dedicated to your business and used for seeing clients, they are considered a **business expense**. Specifically, because these are tangible i...

Deductions and Write-Offs

Home Office deduction

Asked Sunday, May 10, 2026 by Cherilee

I have an S Corp, Home Health Care business. I have a home office that occupies 57% of my home. What percentage of household utility bills can be a business expense

Quick Answer:

If your home office occupies 57% of your home and meets the requirements for a home office deduction, then 57% of your household utility bills can typically be included as a business expense. This pe...

Deductions and Write-Offs

Returns

Asked Wednesday, April 08, 2026 by Stetson

This is my first year doing taxes ever for my business or personally. I started my business just a year ago and have spent $1400 in it this year $1000 of that being in a business computer. since I have zero taxable income is there any way that I can do my taxes in which this business computer is a depreciating asset or some way that I could get some money return this year or the $1000 in total that I spent on this computer or is there no way to do that and I have to roll it over to next year?

Quick Answer:

The $1000 business computer is indeed an asset subject to depreciation. For tax purposes, you have a couple of primary ways to deduct its cost. One method is Section 179 expensing, which allows you t...

Deductions and Write-Offs

529 tax deductions

Asked Wednesday, April 08, 2026 by Peter

Hello I live in Connecticut and work in New York. I have an NY 529. Can I deduct my contributions from my taxes? Thank you.

Quick Answer:

Contributions to a 529 plan are not deductible on your federal income tax return. For New York State income tax purposes, you can deduct contributions made to *any* state's 529 plan. As someone who w...