Can I apply Unreimbursed Expenses on my Personal Taxes from my K-1 (S-Corp)

[superdesi]

My business partner (S-Corp) is happy with his paid off car he has had for years and years and does not want a new one nor does he want to expense any vehicle's on the business.  Therefore I am stuck paying for my vehicle out of my taxed earned income from my k-1.

I also use my home as an office. The company pays for an office he uses which is next to his house but I don't.

I've read and heard if we had some sort of partnership agreement, we would be able to deduct Unreimbursed Expenses (UEP) such as auto mileage, and home office for 2020 returns on my personal.

I've also read, if I am an Officer of an S-Corp we are not permitted to do so. (My accountant said this too)

I am finding various different answers everywhere and in search of another opinion. Please help, thank you.

[Opus 17]

You can't deduct unreimbursed car expenses on your form 1040, that deduction was eliminated in the tax reform of 2018.

You can be reimbursed by your business tax-free under an accountable plan.  See generally chapter 4 here.

https://www.irs.gov/pub/irs-pdf/p463.pdf

If you provide the business timely proof of your business-related expenses (not just car, but any other expenses you might incur), the business can reimburse you tax-free.  For car expenses, timely proof might be a mileage log showing the date, mileage, and business purpose of each trip, that you submit monthly or quarterly for reimbursement.  The business will report the expenses as business expenses, which will pass through to each partner.  Essentially, if there are two partners and you have $1000 of car expenses, you would be reimbursed tax-free, but then both partners will see a $500 reduction in their taxable profit.

All the partners should certainly have some agreement or a meeting of the minds on what kinds of expenses will be allowed.  There is no special requirement that the agreement be in writing, although getting it in writing can help avoid disagreements in the future.  Otherwise, someone could view this as a sneaky way of taking out more than their "fair share" from the business.  (There's no reason the other partners could not also get reimbursed for their mileage.).  The other side of the argument is that if you are taking on extra costs out of your own pocket that benefit the business, and not getting reimbursed, then the other partners are benefitting at your expense.  

I don't know of any reason why an owner can't have work-related expenses reimbursed from an accountable plan.  It must certainly be set up correctly, and follow all regulations, so that it does not become a way to receive extra un-taxed compensation. 

https://proconnect.intuit.com/taxprocenter/tax-law-and-news/how-your-s-corporation-clients-can-use-a...