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WayCup Creative LLC

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WayCup Creative LLC

CORPORATE RESOLUTION & AGREEMENT: ACCOUNTABLE PLAN

IRS-Compliant Out-of-Pocket Reimbursement Policy for S-Corporation

I. CORPORATE RESOLUTION

RE: ESTABLISHMENT OF AN EXPENSE REIMBURSEMENT POLICY (ACCOUNTABLE PLAN)

The undersigned, being the sole Director and Shareholder of WayCup Creative LLC (the “Corporation”), a corporation organized under the laws of the State of Illinois, hereby adopts the following resolution:

WHEREAS, the Corporation desires to establish an IRS-compliant expense reimbursement policy (an “Accountable Plan”) pursuant to Internal Revenue Code (IRC) Section 62(a)(2)(A) and Treasury Regulations Section 1.62-2, to reimburse employees for ordinary and necessary business expenses paid or incurred on behalf of the Corporation;

NOW, THEREFORE, BE IT RESOLVED, that the Corporation hereby adopts and establishes the following Accountable Plan, effective January 1, 2026:

  1. Reimbursement Policy: The Corporation shall reimburse employees for all reasonable, ordinary, and necessary business expenses incurred on behalf of the Corporation, provided that such expenses meet the requirements of an IRS Accountable Plan as described below.
  2. No Additional Compensation: Reimbursements made under this Plan shall not represent additional compensation to the employee and shall not be subject to federal income tax withholding or payroll taxes (FICA, FUTA), provided the employee satisfies the requirements of this Plan.
  3. Administration: The officers of the Corporation are authorized and directed to take all such actions and execute all such documents as may be necessary or advisable to implement and administer this Plan.

II. THE ACCOUNTABLE PLAN AGREEMENT

This Accountable Plan (the “Plan”) governs the reimbursement of business-related expenses incurred by employees of WayCup Creative LLC (the “Corporation”). To qualify as a tax-free reimbursement, every transaction must meet the following three-part IRS test:

1. Business Connection Requirement

All reimbursed expenses must have a clear business connection. They must be paid or incurred by the employee while performing services as an employee of the Corporation and must be “ordinary and necessary” expenses under IRC Section 162 in carrying on the business of the Corporation.

2. Substantiation Requirement

The employee must substantiate the elements of each expense (amount, date, place, business purpose) within a reasonable period of time.

  • Receipts: Receipts are strictly required for all expenditures of **75.00, detailed logs or invoices are required.
  • Documentation: Substantiation must include the original receipt, invoice, or credit card statement transaction, along with a written statement of the business purpose.
  • Reasonable Timeframe: Expenses must be submitted to the Corporation for reimbursement within 60 days after they are paid or incurred.

3. Return of Excess Amounts

If the Corporation advances funds to an employee for business expenses, the employee must return any excess (unspent) portion of the advance within a reasonable period of time.

  • Reasonable Timeframe: Any excess amount must be returned to the Corporation within 120 days after the expense is paid or incurred.

III. APPROVED REIMBURSEMENT CATEGORIES

The Corporation authorizes the reimbursement of the following out-of-pocket expenses under this Plan:

A. Home Office Expense (IRC Section 280A)

Where an employee maintains a home office exclusively and regularly used as the principal place of business for the S-Corporation, the Corporation shall reimburse the employee for the S-Corp’s pro-rata share of household expenses:

  1. Direct Expenses: Repairs, painting, and maintenance performed directly on the home office space (100% reimbursable).
  2. Indirect Expenses: Rent (if leasing), real estate taxes, home insurance, utilities (electricity, gas, trash), security systems, and general home repairs (reimbursable pro-rata based on home office square footage relative to total home square footage).
  • Note on S-Corps: S-Corporation owner-employees should not claim home office deductions on Schedule C or Schedule A. Instead, the home office must be reimbursed tax-free by the S-Corp via this Accountable Plan and claimed as an operating expense on Form 1120S (Line 19 - Other Deductions).

B. Telecommunications (Internet & Cell Phone)

The Corporation shall reimburse employees for the business-use percentage of their personal mobile phone plans and home internet service.

  • Substantiation: The employee must document their estimated business use percentage (e.g., 80% for phone, 70% for internet) based on monthly service invoices.

C. Business Mileage (IRC Section 162)

The Corporation shall reimburse employees for business mileage incurred while operating a personal vehicle for corporate business.

  • Rate: Reimbursement will be calculated using the official IRS Standard Mileage Rate in effect at the time of travel.
  • Substantiation: The employee must maintain a contemporary mileage log documenting: (1) Date of travel, (2) Destination and business purpose, (3) Starting and ending odometer readings or Google Maps distance calculations, and (4) Total business miles driven.

D. Meals and Entertainment

The Corporation shall reimburse employees for 50% (or the legally applicable percentage) of the cost of business meals provided to clients, partners, or prospects, subject to strict IRC Section 274 substantiation rules:

  • Required Info: (1) Amount, (2) Date, (3) Location, (4) Name and business relationship of the attendee(s), and (5) Specific business discussion topic.

IV. ANNUAL COMPLIANCE AND REVIEW

This Plan shall be reviewed annually by the Board of Directors of WayCup Creative LLC to ensure alignment with current IRS regulations and state tax guidelines.

IN WITNESS WHEREOF, the sole Director and Shareholder of WayCup Creative LLC has executed and approved this Resolution and Accountable Plan as of the date first written above.

Dated: January 1, 2026

Signed: _____________________________________ Kevin Dockman Sole Director and Shareholder, WayCup Creative LLC

V. EMPLOYEE OUT-OF-POCKET REIMBURSEMENT CLAIM FORM

Employee Name: Kevin Dockman
Claim Period: [Month/Quarter, Year]
Submission Date: [Date]

CategoryDate IncurredDescription / Business PurposeVendor / ProviderTotal Cost ($)Business %Reimbursable ($)
Home Rent / Mort.Monthly rent (office pro-rata: __%)
Utilities (Elec/Gas)Electric & Gas (office pro-rata: __%)
Home InternetHigh-speed internet service
Cell PhoneMobile phone line and data plan
Business MileageSee attached contemporary mileage logIRS Rate
Business MealsIncurred meals (must attach receipt & log)
Other (Software/Supplies)Out-of-pocket supplies / tools
TOTAL CLAIM$

Employee Certification:
I hereby certify under penalty of perjury that the above expenses were incurred strictly on behalf of WayCup Creative LLC and represent ordinary and necessary business expenses in the performance of my duties.

Signed: _____________________________________ (Employee)
Signed: _____________________________________ (Approved by Officer)

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