THIS WEEK'S STORY
You're already paying for it. You're just not getting paid back.
Tom runs a design-build firm here in the Bay Area. Sharp guy. Good books.
Last month he sat across from me and said, "I drive all over for site visits. I work out of my spare bedroom half the week. My cell phone is basically a second office. None of that shows up anywhere on my taxes."
I asked him one question. "Tom, are you an S-corp?" He was.
So I told him what I tell a lot of construction and design owners who incorporated but never finished the job. You have a corporation. You are an employee of that corporation. And your company can pay you back for the money you spend on its behalf. Tax-free to you. Deductible to the business.
It's called an accountable plan. Fancy IRS term for "reimbursement." That's it.
But here's where most owners get burned. The plan has to be a written document, signed and dated, before you reimburse yourself a single dollar. Not at tax time. Not the night before the auditor calls. Before.
That document is your only defense if the IRS comes knocking. No written plan, and every reimbursement you took can get reclassified as taxable wages. The deduction you thought you had turns into a bill.
So you set it up first. Then the reimbursements work.
The home office counts. Office square footage divided by total home, applied to utilities, internet, water, cleaning if clients come by. Your mileage counts. Every drive from that home office to a job site, at seventy-two cents per mile ($0.72) in 2026. Your phone counts.
And you document every one. Pay with your personal card. Snap the receipt. File an expense report. The company pays you back. Paper behind every dollar.
Tom had been eating those costs for three years. We fixed it in an afternoon.
