Accountable Plan & Capitalization Policy Builder
Steven D. Schlagel, CPA, PC | mentoring2mastery.com
Generates the Travel and Expense Reimbursement Plan under IRC §62(a)(2)(A) and Treas. Reg. §1.62-2. Complete company information and policy options below. These values carry forward to all other tabs.
Company Information
Signing Officer
Policy Options
Receipts required for travel, entertainment, gifts, or vehicles at or above this amount.
Days after expense is paid or incurred to submit expense report.
Under IRC §62(a)(2)(A) and Treas. Reg. §1.62-2, an accountable plan allows an employer to reimburse employees for business expenses on a pre-tax basis. Three requirements must be met: (1) business connection — expenses must have a business purpose; (2) substantiation — employees must document amounts, times, places, and business purpose; and (3) return of excess — employees must return any advances exceeding actual expenses.
For S-corp owners (≥2% shareholders), proper accountable plan reimbursements are deductible by the company and excluded from the employee-owner's wages, avoiding both income and payroll taxes. Without a formal written plan, reimbursements may be treated as additional wages subject to FICA.
For S-corp owners (≥2% shareholders), proper accountable plan reimbursements are deductible by the company and excluded from the employee-owner's wages, avoiding both income and payroll taxes. Without a formal written plan, reimbursements may be treated as additional wages subject to FICA.
Generates the Unanimous Written Consent by which the Members formally adopt the Accountable Plan. Company information is carried over from Tab 1.
Company Information (from Tab 1)
Defaults to Accountable Plan effective date; adjust if needed.
Signers
For an LLC, list all Members. For a Corporation, list all Directors. Each signer signs the consent.
Authority to adopt a company policy rests with the governing body. For a corporation that is the Board of Directors; for an LLC it is the Members (or Managers if manager-managed). Using the correct title ensures the consent reflects proper governance authority under the applicable state statute and creates a defensible record that the plan was formally adopted.
Generates the written Capitalization Policy required to elect the de minimis safe harbor under Treas. Reg. §1.263(a)-1(f). Company information is carried over from Tab 1.
Company Information (from Tab 1)
Defaults to January 1 of the current year — must be the first day of the tax year to be effective for that year.
Signing Officer
Policy Options
Items at or below this cost are deducted rather than capitalized.
Treas. Reg. §1.263(a)-1(f) — The tangible property regulations allow taxpayers with a written capitalization policy to deduct amounts paid for tangible property up to a per-item or per-invoice threshold.
• $2,500 threshold: Available to any taxpayer without an Applicable Financial Statement (AFS). No audited financials required. Policy must be in place at the beginning of the tax year.
• $5,000 threshold: Available only to taxpayers with an AFS (audited financial statements, certified report, or financial statement filed with the SEC or a government agency). Policy and AFS must both be in place at year-end.
The election is made annually on the tax return by deducting the amounts. Items below the threshold are not required to be capitalized and depreciated.
• $2,500 threshold: Available to any taxpayer without an Applicable Financial Statement (AFS). No audited financials required. Policy must be in place at the beginning of the tax year.
• $5,000 threshold: Available only to taxpayers with an AFS (audited financial statements, certified report, or financial statement filed with the SEC or a government agency). Policy and AFS must both be in place at year-end.
The election is made annually on the tax return by deducting the amounts. Items below the threshold are not required to be capitalized and depreciated.
Generates the Unanimous Written Consent by which the Members formally adopt the Capitalization Policy. Company information is carried over from Tab 1; signatories default from AP Minutes (Tab 2).
Company Information (from Tab 1)
Defaults to Cap Policy effective date; adjust if needed.
Signers
These signers are pre-populated from the AP Minutes (Tab 2). Add or adjust as needed.