The Reimbursement Kit. Is intended for companies handling internal transfers converting from sole proprietor or partnership to incorporated business, such as C or S-Corporations. Once a business is incorporated, the personal and business transactions can no longer be mixed as freely. If reimbursements are not properly proven, a company may loose their corporate status and its limited liability.
- There are 6 sets of documents
- Accountable Plan
- Mileage Reimbursements
- Home/Office Expense Reimbursements
- Bus. Reimbursements
- When pers. accounts were used for partial or 100% bus. expenses
- Pers. Reimbursements
- When bus. accounts were used for partial or 100% pers. expenses
- Multiple Reimbursements
- The process:
- Mark “R” with a circle around it (receipt & register), if there is mix between bus./pers. transactions & Accounts
- Track these “R” receipts into the reimbursement logs
- Total up these reimbursement logs monthly on the “Multiple Reimbursement” sheet
- Transfer funds to/from the bus./pers. accounts for the net reimbursement amount on the “Multiple” Reimbursement sheet
- How do you pass an audit?
- It is customary to do reimbursements no later than 120 days from the business transaction. Otherwise, the reimbursement may not be considered timely.
- So long as the reimbursements are being tracked, and an attempt is made to separate bus./pers. expense, auditors will be more reasonable with you, than not having an Accountable Plan & reimbursement system in place.
Generic templates are provided. Please book a consultation if you would like these to be customized to your business.
