cancel
Showing results for 
Search instead for 
Did you mean: 

Question about self employment and reimbursed expenses

tag
dazacman30
Valued Member

Question about self employment and reimbursed expenses

I am the sole owner of an S-Corp and pay myself via W-2 as well as take reasonable shareholder disbursements during the year.

 

Does Reimbursed Employee Expenses get added into average earnings?  They are reported on the corporate tax return as such via an Accountability Plan I have for myself since I work from my dedicated home office.  Over the past 2 years, they have accounted for an average of $4500 per year ($400 per month).  This is non taxable income, so perhaps it would not be factored in at all for the mortgage / income amount?

Bouncing back from BK '09
10/2012: 641(EQ) 636(TU) 624(EX)
4/2015: Equifax 694, TU 687, Exp 706
Goal: 700+ all 3 by June 2015
Message 1 of 2
1 REPLY 1
ShanetheMortgageMan
Super Contributor

Re: Question about self employment and reimbursed expenses

Reimbursed Employee Expenses are items the employee paid which the company reimbursed them for. 


For example if an employee makes $50k, paid $4k for employment related expenses and was reimbursed that $4k by their employer, their income is still $50k... not $50k + $4k.

 

From a corporate tax return viewpoint, reimbursed employee expenses are treated as an expense, reducing the taxable income the corporation makes.

 

So if you are the only employee of your company, reimbursed employee expenses would reduce the amount of K-1 income you pay yourself but wouldn't impact the W-2 income you pay yourself.

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 2 of 2
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.