What is an accountable plan?

An accountable plan is an IRS-approved method for being reimbursed for business expenses that a taxpayer has paid personally. The most common use of an accountable plan is for reimbursing employees and business owners for business mileage. The taxpayer keeps a log of work-related mileage driven for the business purposes, submitting the log to the business periodically for reimbursement. The business cuts a check to the employee and the amount is deductible to the business but not taxable to the employee.

An accountable plan can also be used to submit receipts for reimbursement of meals and entertainment, home office expenses, business supplies, or any out-of-pocket expense that is an “ordinary and necessary” business expense. When considering employment, having access to an accountable plan for reimbursement of business expenses can be a good point of negotiation. Otherwise, expenses you pay for yourself that are job-related are deductible for amounts only above 2% of your AGI, which is a threshold that doctors rarely meet, except in residency/fellowship.

Should my business own my car?

Is my mileage deductible?

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