I want to add here, that if the business is going to reimburse members for their expenses and not have that counted as part of their taxable pass-through income, the business must have an accountable plan, where the member submits receipts or other proof that the expense is an ordinary and necessary expense of the business. With an accountable plan, members can be reimbursed tax-free, and it comes out of the business as an expense before the remaining income is passed through to the members. However, if the business does not have an accountable plan, then the business can't reimburse members tax-free. The members must include the expenses on their own tax returns, and they can deduct them assuming they have their own reliable records.
For more about accountable plans, see publication 463.
https://www.irs.gov/publications/p463
