how to

[ianleonard]

How does one write off their home office / phone bill etc on their LLC’s taxes? What are the forms? Do i need to keep my receipts. What else do i need to do 

[mirthaguer]

I understand your question is how to deduct home office expenses in your LLc taxes. If you have a single member LLC it is treated as an ignored entity and you enter the information on schedule C of form 1040.  I suggest you open a bank account in the LLC name  to record all the LLC income and expenses.  It is much easier not to miss expenses if  you pay all of the business  expenses from the LLC bank account. Do not pay  personal from the LLC bank account.  Take distributions, but do not pay personal expenses.  You must also keep all receipts.  I suggest you adopt an accountable plan with the LLC.  You can google accountable plan to see what would work for you.  With respect to auto expenses you need to keep a log of total miles for the year and business miles.  For home office you need to have a separate room that you use solely in the LLC business. You need to allocate the expenses based on square footage.   Also take a look at IRS instructions for form 8829.  See link below: https://www.irs.gov/forms-pubs/about-form-8829

[ph56]

What is an "accountable plan" that is recommended for the LLC (see ~8th sentence)?

[NateTheGrEAt]

An accountable plan is a method by which you can have the LLC reimburse yourself for business expenses you incurred, and not count the reimbursements as income. 

The IRS describes accountable and nonaccountable plans in Chapter 6 of Pub 463. The requirements to be an accountable plan are set forth in the Publication. They are not very complicated; you simply need to adopt them for your business and follow processes to ensure that you're reimbursing yourself appropriately (such as, only reimbursing the amount you can prove as a business expense, keeping receipts. and the like). 

[drc845443]

An Accountable plan is a documented procedure that allows a business to reimburse employees or business owners for expenses incurred on behalf of the business, provided they meet certain criteria. For example, the plan may require that the employee claim the reimbursement within a certain timeline, present receipts to prove the amount of the expenses, or provide an explanation justifying why the expense was a business expense.

Amounts that are reimbursed as business expenses under an Accountable Plan are not subject to income tax in the hands of the receiver.

Here is a resource that you may find helpful in this regard:

https://www.journalofaccountancy.com/issues/2020/feb/employee-expenses-accountable-plan.html

[NeilM7]

An accountable plan is a method for reimbursing employees, partners, members, shareholder-employees of an S Corpm and independent contractors for any authorized business-related out-of-pocket expenses. If the accountable plan satisfies the requirements specified by the IRS, reimbursements for any and all eligible business related expenses are not considered income to the employee, etc., but are considered a deductible expense of the business. For the plan to be considered an accountable plan, it must be for business related expenses incurred within the normal course of employment, be adequately accounted for and to the employer in a timely manner, and that any excess reimbursement be returned to the employer. Here is a link to a Sample Accountable Plan:

https://accountants.intuit.com/taxprocenter/wp-content/uploads/2017/09/a21e5-accountableplanagreemen...