For small business owners, particularly if they operate flow through entities such as S corporations or Limited Liability Companies, they should review what expenses they may have incurred on their personal account on behalf of their business, such as travel, meals and entertainment, supplies, personal vehicle mileage, and even the business use of their home. Then, they should recharacterize their distributions from their business as reimbursements for those expenses. By doing so, those expenses become deductible to the business and not taxed to them personally. This will also reduce their income tax liability.
Reimbursed Business Expenses
Posted on 02/21/2013 in News