S corp painting contractors can reimburse themselves for business expenses like mileage and supplies tax-free through an accountable plan, as long as they take a reasonable salary first. The company deducts the expense and you get the money untaxed. Many small business owners don't know about this.
Chapters
Accountable plan is a fancy term for a reimbursement plan that follows IRS guidance. It is a very powerful tool to make sure that you're not leaving any deductions on the table. An accountable plan, in short, is going to allow your business to reimburse you every time you use personal money, uh, for business purposes. So when you drive your personal car to Sherwin-Williams and you buy a bunch of roller covers and you pay for it with a $50 bill out of your own wallet, your company has the, the legal and the IRS-approved framework for paying you back. And that way the company gets the deduction and you get the money, and that money is not taxable gain to you. So make sure if you have an S corp, one of the first things you need to do is, well, first, get yourself on salary. Second thing, get the accountable plan. You can do them both on the same day, and that's going to make sure that you don't lose out on any of those valuable deductions.
It's funny, you were saying that, um, S corp is the most popular tax status for small businesses, but nobody knows what an accountable plan is. It's true.
