Lesson · Facts First
The Accountable Plan
An accountable plan turns your business reimbursements into deductions for the company and non-income for you - no W-2 gymnastics.
The facts
- 01Three requirements (Treas. Reg. 1.62-2): a business connection for every expense, substantiation (receipts, logs) within a reasonable time, and return of any excess advance within a reasonable time.
- 02Meet all three and reimbursements are excluded from your income and deductible to the business - miss them and the same money becomes taxable wages.
- 03Home office rent under the Augusta Rule, mileage at the IRS standard rate, and phone/internet used for business are the classics - the plan paperwork is what makes them clean.
- 04Mileage: keep a contemporaneous log - date, destination, business purpose, miles. Reconstructed logs lose in audit.
Sources
- Treas. Reg. 1.62-2 (accountable plans)
- IRS Publication 463 (travel, mileage)
- IRS: Accountable plan rules
Educational content only — not tax, legal, investment, or VA-benefits advice. Figures verified against the cited sources for 2026; confirm your own situation with a qualified professional before acting.
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