Hey, Sharon, today we're gonna be talking about accountable plans. Have you ever been held accountable? I've been held accountable lots of times by about 60,000 CRNAs. And I imagine you were held very accountable at that point. And happy to be so. Exactly, exactly. Well, you know, a lot of people haven't heard of accountable plans or understand what they are, especially in the context of owning your own 1099 business. And to be honest with you, a lot of people do things they shouldn't be doing because they don't know the ramifications of it. So let's talk about that. So an accountable plan basically sets up a reimbursement mechanism for you to be able to reimburse yourself as an employee for things that maybe you paid personally. Sharon, you go somewhere and you don't have your business credit card and you put your flights to go to A&A on your personal credit card. And most people just basically reimburse themselves and write themselves a check or transfer money and they're done. Well, did you know that you shouldn't be doing that? Basically, what should happen in that scenario is you include that in your wages and pay taxes on it. So setting up an account- I don't wanna do that. It allows you to do this and not pay income taxes, not pay payroll taxes once you reimburse yourself. Now, there are some rules that are in that. Obviously, you've gotta comply with the plan rules, IRS regulations and so forth, and you minimize your chance of being audited. And it allows you to get a better control on your finances. Now, I will tell you, we tell our clients all the time, try not to co-mingle business and personal expenses. It happens sometimes. We have some CRNAs that never listen and they do this constantly. And they reimburse themselves and so forth. And we tell them, this is not the proper way to do it. Some people don't listen. Basically, if you're an S corporation, you are an employee of your corporation. Now, remember, if you're just a straight LLC or PLLC, you are not an employee. You're the owner or the member, but you're not an employee. So what we're talking about here is S corporations. That can be your PLLC, your LLC, being taxed as an S corporation, okay? So if you do not have employees, you are eligible to implement this accountable plan and manage all your business expenses. You must have a formalized accountable plan. In other words, you've got to have it written out. What qualifies for this accountable? Like this is what the IRS requires. One, documentation. Your expense reports and your receipts, you've got to submit for every reimbursement. Sharon, you flew to San Diego for your A&A meeting. You didn't have your company credit card. You charged it personally. Then you submit an expense report to yourself. And you write on there, A&A meeting, flight, reimbursement to Pierce. Yes. You submit that to your HR department, put your other hat on and submit it to yourself. The expense must have a business connection, okay? It cannot be that Sharon went to the YouTube concert and charged it to her personal and is going to reimburse herself on the business. Doesn't work. It has to be something related to the business. And the IRS says the reimbursements must be timely, okay? It can't be that you waited from January to December to reimburse yourself. Typically, we tell them to do it every 30 days. So these are the requirements from the IRS for an accountable plan. It needs to be formalized, okay? When you set up an accountable plan, you've got to have an accountable plan document. It has to have a clear policy about running the rules and procedures for documenting and reimbursing yourself for expenses. You've got to define what expenses are eligible for reimbursement under this plan. So again, it's these type of things where people start to mess up and miss it. Are they going to get caught? Maybe, maybe not. If you do, you're going to wish you had this plan in place. So that's why we're talking about it today. Maintaining the records of this, okay? You keep a file, a folder, a computerized file of reimbursements, what the business reasoning behind that was. You reimbursed it and you match those reimbursements up. And then you make sure that that plan stays in compliance. The IRS is always changing rules and regulations. If you've got this plan in place, just make sure you check in on that. And you're doing this pretty regularly to make sure you're staying on top of it. Are you doing this, Sharon? Yes, you know, I am anal retentive about all of that. Now that I've learned about your little book, I have a big notebook with every single month and all my expenses. It sounds like a lot, but it's a process. And that's one of the reasons we're doing this is to make sure that everybody is taking every step in the process.

Accountable plans

Business expenses

Reimbursements

IRS regulations

S corporations