“If my LLC reimburses me for the office portion of real estate taxes paid on my home, can I also deduct the total amount of real estate taxes on Schedule A of my Form 1040?”
A home office reimbursement from your own company feels like a win — until tax time, when the question becomes whether you can still deduct the full property-tax bill on your personal return.
Quick answer: No. If your company gives you a home office reimbursement for the office share of your property taxes — typically through an accountable plan in an LLC taxed as an S-Corp — that share can’t also go on Schedule A. You prorate: only the unreimbursed, personal portion stays. The same tracking applies to mortgage interest and depreciation run through the plan, so tell your preparer exactly what was reimbursed.
First, why is your LLC reimbursing you at all? An LLC can be taxed as a sole proprietorship, a partnership or an S-Corp, and each works differently. But the word reimbursement points to an accountable plan — most often found in an LLC taxed as an S-Corp — where the company pays you back, tax-free, for business costs you personally incurred, like the business-use share of your home.
Once part of your real estate taxes has been reimbursed through the business, you can’t deduct the total amount again on Schedule A. You prorate. Example: a $10,000 property-tax bill with a 20% office share means $2,000 was reimbursed through the plan, leaving $8,000 eligible for Schedule A (still subject to the state and local tax deduction limit). Each dollar picks one lane — business reimbursement or personal deduction, never both.
If you’re running real estate taxes through the accountable plan, you’re probably also running the office share of mortgage interest — and possibly depreciation on the home. Those need the same proration and tracking. Depreciation matters later, too: it reduces your basis and can come back as taxable gain when you sell the home.
The fix is simple but it requires tracking. Keep a log of what the business reimbursed — taxes, interest, depreciation — and hand it to whoever files your personal return. Real estate taxes have a specific calculation, and your preparer can only get it right if they know how much already ran through the company. Ten minutes of tracking beats an amended return.
Official IRS reference: IRS — Publication 587, Business Use of Your Home
Only the portion that wasn’t reimbursed. The reimbursed office share can’t be deducted a second time.
A reimbursement arrangement where an employer pays back substantiated business expenses. Reimbursements are tax-free to the employee and deductible to the company.
Yes. If the office share of mortgage interest runs through the plan, only the remaining personal share belongs on Schedule A.
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Disclaimer: This article is for educational purposes only and is not tax, legal, or financial advice. Every situation is different — talk to a qualified professional about your specific facts before making any decisions.
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