Businesses can reimburse owners and employees for out-of-pocket expenses under an accountable plan, a set of rules and processes that allow tax-free reimbursements of certain business expenses. The best time to set up an accountable plan is now.
To claim a deduction for the business use of your home, you must qualify under one of the following circumstances:
You use a portion of your home regularly and exclusively (1) as the principal place of business for a trade or business; (2) as a place to meet with clients, patients or customers in the course of the trade or business; or (3) in connection with your trade or business, if the location is in a separate structure not attached to the home.
Do you throw a holiday party, summer outing or a similar type of event for your employees? The expense of providing recreational, social or similar activities (including the use of a facility) for your employees is deductible and isn’t subject to the 50% limit. However, the benefit must be primarily for employees who aren’t highly compensated.