Is there a way that I can write a contract between myself and my small business to have the company legally pay personal bills such as rent, utilities, even groceries, etc?

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Is there a way that I can write a contract between myself and my small business to have the company legally pay personal bills such as rent, utilities, even groceries, etc?

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Asked on July 3, 2013 under Business Law, West Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Yes. You can make these expenses part of your compensation, so that instead of, or in addition to, drawing a salary, you have rent, utilities, etc. covered. Note that if you are excessive in what you try to claim, the IRS and/or state tax authorities may refuse to accept some of the costs as legitimate business expenses (even as a legitimate part of your compensation, if the total compensation is disproportionate to your business's revenue), so you are advised to speak with a CPA first, to determine what and how much you may safely have the company pay for you. In a similar vein, note that if the company pays expenses for you, that will be considered income to you (e.g. it's income whether the company hands you $1,000 in wages or buys you $1,000 of groceries), so again, speak with a CPA first, to make sure you understand all consequences and structure it in the most tax-advantageous way.


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