Are You Writing Off Your Home Office in Your S Corporation?
Dec 03, 2025
If you're operating as an S Corporation and using part of your home as your office, you most likely can write-off your home office. But if you wait until you file your tax return, it's too late to claim the deduction.
The logistics on how you track, reimburse and deduct the costs is completely different than how a home office is deducted by a sole proprietor or single-member LLC. Once you elect S Corporation status, you can no longer take the home office deduction directly on your personal tax return.
Instead, the compliant and IRS-approved way to capture these deductions is by using an Accountable Plan.
What Is an Accountable Plan?
Think of an Accountable Plan like submitting an expense reimbursement policy. It is simply a written policy that allows your S Corporation to reimburse you, as the employee, for business expenses you personally paid out of pocket.
- Your S Corporation receives the deduction.
- You receive a tax-free reimbursement.
- The IRS is satisfied because the structure is compliant.
Note: Accountable Plans are discriminatory. What does that mean? It means you can provide certain reimbursements like home office expenses to select employees, directors or officers and don't have to offer it to all eligible employees.
Why S Corporations Must Use an Accountable Plan
Because S Corporations cannot take a home office deduction on the personal return, the company must reimburse the shareholder-employee for their share of expenses such as:
- Rent or mortgage interest
- Property taxes
- Utilities
- Homeowners insurance
- Repairs
- Internet
- And other allowable home-office-related costs
However, the IRS has strict timing and documentation rules. To remain compliant, you must submit expenses within 60 days and reimburse within 120 days. If you wait until the end of the year, you miss out on three-quarters of the tax deduction because you waited too long.
Why Monthly Tracking Matters
The IRS requires documentation for these reimbursements. That means actual expenses, proper allocation, and support. A monthly tracking spreadsheet makes this simple and ensures you stay compliant and organized.
For our clients, we provide a monthly home office tracker, training, and even an online course that walks through the entire process step-by-step. This eliminates confusion and keeps everything above board.
Include Your Accountable Plan in Your Annual Corporate Minutes
S Corporations are required to hold annual board meetings and document them in corporate minutes. Your Accountable Plan policy should be included in your annual minutes.
If you are not maintaining minutes, you may be out of compliance and you are likely missing deductions that you are entitled to related to the cost of holding those board meetings.
With chatgpt, you can likely write up some annual meeting minutes fairly quickly...but sometimes you get what you pay for and your AI written minutes may be lacking. If you are looking for an affordable done-for-you package that includes your annual meeting minutes, we recommend the Main Street Business Compliance Package.
The Self-Rental Trap
Some S Corporation owners were told to rent a room in their house to their S Corporation. This usually leads to the self-rental trap. In a self-rental scenario, you must report the rental income and it receives non-preferred tax treatment. In most cases, this results in a larger tax bill rather than a smaller one. An Accountable Plan is almost always the better and simpler solution.
Bonus: Mileage Reimbursements
An Accountable Plan does not only apply to home office costs. You can also reimburse yourself for business miles driven using your personally owned vehicle. This is another valuable deduction S Corporation owners often overlook.
Have your vehicle titled to you personally? Track your mileage and reimburse yourself via the Accountable Plan and get that tax write off as well!
Proactive Tax Advisors Save S Corporation Owners Significant Money
The home office reimbursement is just one strategy we help our S Corporation clients implement. As proactive tax advisors, we guide clients through multiple advanced strategies such as:
- Accountable Plan
- Reasonable Salary
- Retirement Structure and Optimization
- Board of Director Meetings - Compliance and Deductions
- Health reimbursement structures
- Income shifting
- And other S Corporation tax saving opportunities
When combined, these strategies often help our clients find $30,000 to $50,000 more tax write offs per year. We have a top selling package that includes these tax strategies called our S Corp Hero Package. Because when you implement these strategies correctly, you truly become the hero of your bank account and smaller tax bill.
Summary
Using an Accountable Plan is one of the most valuable and IRS compliant ways for S Corporation owners to capture home office deductions. The key is following the rules, documenting properly, and staying consistent.
If you want the tools, templates, and training to implement your own Accountable Plan, or you want to take advantage of the full suite of tax savings strategies available to S Corporation owners, we can help you through our S Corp Hero Package. Send an email to [email protected] if you would like to hear more.
If you are a DIYer and want to tools, we offer an online course that provides videos, training and templates to allow you to implement this at your own pace and on your own time.
