Can I justify kitchen remodel expenses on my business account for home-based HVAC company?

While you have a home office that qualifies as a business location, the kitchen remodel is generally considered a personal expense and not deductible for your business. The IRS is pretty strict about separating personal from business expenses, especially with S Corps. Here's what you should do: Talk honestly with your accountant about reclassifying this as a distribution to you as the owner, not a business expense. Since you're an S Corp, you can take distributions that aren't subject to self-employment tax (though they're still part of your personal income). Your accountant can help record this as an owner's draw or shareholder distribution. Don't try to justify it as a business expense - that could raise red flags in an audit. The fact that you use the kitchen for personal meals means it can't be claimed as an ordinary and necessary business expense, even if occasionally used for business purposes.

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Your accountant is right to question this. As an S-Corp, the business and your personal finances need to be separate. The kitchen remodel should be paid from personal funds. What you've done is essentially taken a distribution without properly documenting it. The best approach now is to reclassify this as a shareholder distribution or loan to shareholder. If you classify it as a loan, you'll need to repay it with interest at market rates. Otherwise, it should be a distribution which will show up on your K-1. Don't try to claim the kitchen as a business expense unless you only serve clients there and never eat there personally (which is obviously not the case in a family home).

I'd recommend talking to a tax pro about taking a home office deduction, but do NOT try to write off the kitchen as a business expense. Even with a legitimate home office, you can only deduct expenses for the specific area used EXCLUSIVELY for business. The kitchen is clearly a personal space (unless you're running a catering business, which you're not). Either repay the business from your personal account or have your accountant record it as a distribution to you as the owner.