Learning Center
We keep you up-to-date on the latest tax changes and news in the industry.
Remote Employees, Reimbursements & Taxes: The Two Paths You Can Take
Your team’s remote. They’ve got internet bills, home office gear, maybe extra phone costs. And you—being the good boss you are—want to cover those costs.
But here’s the catch: how you reimburse them changes everything.
There are really only two paths:
Path 1: The “Easy” Way — Taxable Reimbursements
You write a check or run a flat $150 “remote work stipend” through payroll each month. It’s simple. Everyone knows what they’re getting.
But it’s taxable income.
That means:
You pay payroll taxes.
The employee pays income tax.
It shows up on the W-2 like salary.
Is it convenient? Sure. But it’s also expensive. You’re giving $150, and they’re pocketing maybe $100 after taxes.
Path 2: The “IRS-Approved” Way — Accountable Plans
Here’s where it gets better. With an accountable plan, you can reimburse employees tax-free.
That means:
No payroll taxes.
No income tax.
No W-2 reporting.
The business still deducts the expense, but the employee gets every penny.
The trade-off? Documentation. Employees need to show receipts, logs, or statements, and if you advance money, they need to return anything they don’t spend. It’s not rocket science—but it does require a process.
Reference: IRS Accountable Plans
Which Way Is Right for You?
That depends on your team and your appetite for admin work.
Don’t want to chase receipts? A flat, taxable reimbursement may be easier.
Want to maximize dollars to employees and reduce tax costs? An accountable plan is worth the setup.
And remember: some states (like California) require reimbursement for necessary business expenses. So in certain places, not having a plan in place isn’t just a missed opportunity—it’s a compliance risk.
Pro Tip: Tier Your Reimbursements
Not all roles need the same level of support. You can structure different tiers:
Base level: Internet + phone.
Mid-level: Add office equipment.
Executive level: Travel, tools, and more.
As long as the expenses are business-related and documented (if you go with an accountable plan), the IRS is happy.
Bottom Line
Two ways exist. One is easy but taxable. The other is structured but tax-free. Both can work—depending on your priorities.
What’s not optional? Thinking about it now. Because as remote work becomes standard, the way you reimburse can either create unnecessary tax costs or save your business (and your employees) real money.
Next Step
We’ll help you figure out the right reimbursement path for your business—whether that’s setting up an accountable plan or streamlining a taxable stipend. Talk to our firm today and get this off your plate.
Want our best tax and accounting tips and insights delivered to your inbox?
Sign up for our newsletter.
Benefits of having a business advisor
Your CFO, Reimagined as a Financial Doctor
Diagnosing root causes, prescribing solutions, and guiding your property business toward long-term wealth.
Our CFO | Advisor
Raquel is a passionate business owner. Now, she is returning to her grassroots with a twist - guiding clients with her expertise as a CPA, she can advise your company as your trusted CFO and Advisor.
-
Raquel Deodanes, MS, CPA
Co-Founder✅ CPA with Real-World Experience – I help property managers stay profitable, tax-efficient, and cash flow positive.
✅ Tax Strategist – Former advisor at California’s revenue agency.
✅ Trusted by 4,000+ Businesses – Experience across CA, FL, TX, NV, and beyond.
✅ Real Estate Investor – I understand the financial realities of property management.
✅ Entrepreneur – I’ve built businesses and know the challenges you face.
Frequently Asked Questions
-
We diagnose financial inefficiencies, treat problems like poor cash flow or rising costs, and guide you to long-term financial health. That includes cleaning up your books, forecasting cash flow, optimizing operations, and helping you grow your portfolio with confidence — just like a doctor builds a custom care plan for a patient.
-
Bookkeepers record transactions. CPAs file your taxes. We connect the dots — helping you understand your numbers, strategically improve them, and make smarter decisions throughout the year. We work alongside your existing team to drive performance, not just compliance.
-
If you're unsure where your cash is going, struggling with rising costs, planning to scale, or just tired of reacting instead of planning — now is the right time. We help you get ahead of problems, not just clean up after them.
-
Clients typically see improved cash flow, cleaner books, higher NOI, better financial reporting, and a lot less stress at tax time. More importantly, you gain clarity, confidence, and control over your business — and a partner who helps you grow it.
Pricing
Painless, transparent pricing.
Let us take away your stress and give you back your time. Choose your perfect package today.
Base
-
Dedicated finance expert
-
Bookkeeping with accrual basis
-
Includes P&L, balance sheet, and cash flow statements
Core
-
Includes everything in Base, PLUS
-
Industry KPIs and financial ratios
-
Monthly virtual 1-hr meetings
-
Monthly rolling budget forecasts
Growth
-
Includes everything in Base, CORE
-
Budget vs. actuals variance analysis and review
-
Payroll and HR Platform