how to

Forum|Forum|1 year ago
May 22, 2024
1 reply
0 views

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

Ask the Experts - Biz Tax - May 2024

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

Employee

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).

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"