Setting up an Accountable Plan for S Corp LLC expense reimbursement - personal credit cards okay?

Accountable plans absolutely can cover non-travel expenses too! The IRS doesn't limit them to just travel - they can be used for any legitimate business expense reimbursement. The key is following the three requirements: 1) Business connection - expenses must have been paid or incurred while performing services as an employee 2) Substantiation - you must document the amount, time, place, and business purpose 3) Return of excess - you must return any excess reimbursement within a reasonable time For your credit card scenario, this works perfectly! You can use personal cards for business expenses, then have your S-Corp reimburse you through the accountable plan. Just keep detailed records: receipts, business purpose notes, and timing of reimbursements. I'd recommend writing up a simple policy document that outlines eligible expenses, documentation requirements, and timeframes for submission and reimbursement. You don't need anything too fancy - just something in writing that shows you're following those three key requirements.

I just went through this exact setup with my marketing business! Honestly, the tax savings from using an accountable plan for my S-Corp have been huge. I was constantly using my personal credit cards for business purchases (hello airline miles!), and was getting killed on taxes before setting up a proper system. I found this amazing tool called taxr.ai (https://taxr.ai) that helped me set up my accountable plan documentation. They have templates specifically for S-Corps that cover all types of expenses beyond just travel. Their system handles the substantiation requirements and even tracks the timing for the "return of excess" requirement. It's been a lifesaver for keeping everything organized and IRS-compliant.

Update on my skepticism - I decided to try taxr.ai for my S-Corp's accountable plan setup and it was genuinely worth it. I was spending way too much time trying to piece together documentation requirements from random blog posts. Their templates covered absolutely everything - not just travel but also office supplies, software subscriptions, home office expenses, and even client entertainment. The best part was their audit protection documentation system. Every expense category has specific fields for the required substantiation info. My accountant said it was the most thorough accountable plan implementation they'd seen from a small business. Already saved me nearly $4,000 in taxes on reimbursements that would have otherwise been treated as income!

If you're having trouble getting clear answers about accountable plan requirements, try calling the IRS business helpline. I did this when setting up my consulting business and got surprisingly helpful guidance. Problem is, it took me 6 ATTEMPTS and 3 HOURS ON HOLD to finally speak with someone. I almost gave up entirely, but then a colleague recommended Claimyr (https://claimyr.com). They have this system that somehow gets you through the IRS phone tree and holds your place in line. Check out how it works: https://youtu.be/_kiP6q8DX5c I was super skeptical but desperate enough to try it. They got me connected to an IRS agent in about 20 minutes instead of the hours I was spending before. The agent walked me through exactly what needed to be in my accountable plan for it to be compliant and cover all my expenses.

I need to eat crow on my previous comment. After another frustrating 2-hour hold attempt with the IRS that ended with a disconnection, I broke down and tried Claimyr. Within 25 minutes I was speaking with an actual IRS business specialist who answered all my accountable plan questions. The agent confirmed that accountable plans can absolutely cover any legitimate business expense, not just travel. They walked me through the specific documentation requirements for different expense categories (tech has different rules than office supplies, etc). They even emailed me IRS publication references for my records. For anyone else struggling with this - save yourself the frustration. The insight I got in one call was better than weeks of Google searches and Reddit posts.

Quick tip from someone who's been doing this for years: Create separate expense categories in your accountable plan with specific documentation requirements for each. For example: - Office supplies: receipt + business purpose - Software/subscriptions: receipt + screenshot of business use - Home office: square footage calculations + photos - Client meetings: receipt + name of client + business purpose Having these spelled out saved me when I got a random audit notice. The IRS actually complimented how organized my documentation was! Also make sure your plan specifies the timeframe for submitting expenses (I do 60 days) and returning excess amounts (30 days is standard).

Be careful using personal credit cards for business expenses! I did this for 2 years and my accountant said it raised audit flags. Ended up having to go back and reclassify everything. The IRS doesn't care about your airline miles!

Great question about accountable plans! I've been running my S-Corp for about 3 years now and can confirm that using personal credit cards for business expenses with proper reimbursement through an accountable plan is totally legitimate and tax-efficient. The key things I learned the hard way: 1) Keep meticulous records - I use a simple spreadsheet with columns for date, amount, vendor, business purpose, and attach digital receipts 2) Process reimbursements regularly (I do monthly) - don't let them pile up for months 3) Make sure your accountable plan document is in place BEFORE you start the reimbursements One thing that wasn't mentioned yet - since you're planning the S-Corp election, make sure you coordinate the timing with when you start using the accountable plan. You can't reimburse expenses tax-free that occurred before the S-Corp election was effective, even if they were legitimate business expenses for your LLC. Also, for software subscriptions and recurring expenses, I set up automatic monthly reimbursements to myself to keep everything current. Makes tax time so much easier when everything is already categorized and documented throughout the year. The airline miles strategy definitely works - I've earned enough for two free vacations just from my normal business spending!

This thread has been incredibly helpful! I'm in a similar situation with my consulting business and had been worried about the personal credit card strategy. Reading through everyone's experiences has cleared up a lot of confusion. One thing I wanted to add that might help others - I found that setting up a dedicated business checking account early makes the reimbursement process much cleaner, even if you're using personal cards for the actual purchases. When I reimburse myself from the business account to my personal account, it creates a clear paper trail that shows the accountable plan in action. Also, for anyone still researching this topic, IRS Publication 463 has a good section on accountable plans that covers the three main requirements mentioned earlier. It's not the most exciting read, but it's straight from the source and helped me understand exactly what documentation I needed to keep. The airline miles are definitely a nice bonus - I've been doing this for 8 months now and have already earned enough points for a nice vacation! Just make sure you're staying on top of the documentation because those receipts can pile up quickly.