0:01
exactly that, a reimbursement plan.
0:04
Sometimes you will spend money on behalf
0:07
of your business. The IRS will respect
0:10
the business reimbursing you for the
0:12
money spent if you have an accountable
0:14
reimbursement plan. Most of the time,
0:16
it’s a pretty simple document. So why do
0:19
I mention it? Because you don’t strictly
0:21
speaking need it for the Augusta rule.
0:23
The Augusta rule can have an indirect
0:25
impact on other things you do. So, let’s
0:29
come back to the generics. The
0:31
accountable reimbursement plan allows
0:33
the business to reimburse you for things
0:36
you paid for. Now, let’s start with
0:38
basics. In general, I don’t like you
0:40
using the accountable reimbursement
0:42
plan. I want every one of you to have it
0:44
just in case. Every taxpayer should have
0:47
this for each business. But, as an asset
0:50
protection lawyer, because remember, I
0:52
wear multiple hats. I’m an accountant.
0:54
I’m a lawyer. Why do I want you to not
0:57
reimburse yourself? Because from an
0:59
asset protection standpoint, I want your
1:02
LLC, your S corp, your CC Corp, whatever
1:05
your entity is to act like a separate
1:08
financial person. What do financial
1:10
people do? They pay their own bills.
1:15
That’s really important from an asset
1:16
protection standpoint. So, in general,
1:19
as a non- tax asset protection lawyer, I
1:22
don’t like businesses reimbursing you
1:24
for things you paid for because the
1:26
business should pay for it. But
1:28
sometimes that’s not possible. And there
1:30
are also sometimes some odd
1:33
circumstances that tax-wise you really
1:36
want the business to reimburse you in
1:39
spite of the asset protection
1:41
implications.
1:42
So, it gets a little convoluted. to
1:45
repeat. Everybody wants to have for
1:47
their business an accountable
1:49
reimbursement plan. I want you to use it
1:51
the least possible. Now, here’s how it
1:54
intersects some with the Augusta rule.
1:58
If you have a home office, you need an
2:00
accountable reimbursement plan. Let me
2:02
repeat that. If you have a home office
2:05
and you write it off, you want an
2:08
accountable reimbursement plan to
2:11
reimburse yourself for the use of the
2:13
home office. Now, if you don’t have a
2:15
home office, if you’re just going to use
2:17
the Augusta rule, there’s no home office
2:19
that you’re using in that personal
2:21
residence, you don’t need to worry about
2:24
this. Would I still use the plan
2:26
document we provide you? So, that in
2:28
general, outside of everything we’re
2:30
talking about, other expenses that you
2:32
reimburse, the IRS respects them. Yes.
2:36
Why do we care? Again, in this specific
2:37
situation, I want an accountable
2:39
reimbursement plan that contemplates you
2:42
reimbursing
2:44
for the use of the home office. That
2:47
way, the Augusta rule does not interfere
2:50
with the home office. The Augusta rule
2:53
improperly used can interfere with your
2:56
home office deduction. We don’t want
2:59
that. Part of planning around such
3:02
interference is making sure that your
3:05
company reimburses you through an
3:08
accountable reimbursement plan for the
3:10
use of your home office completely
3:12
separate from the Augusta rule. That’s
3:15
why we’ve included it. We’re really
3:17
thinking far downstream, not just the
3:20
Augusta rule, but what are the potential
3:23
impacts it can have on other things
3:25
you’re doing? And that’s why we included
3:28
one.