It’s not unusual for a partner to pay for some expenses related to the partnership’s business out of the partner’s own pocket.

This is especially likely to occur if you are a partner in a service partnership, such as a medical practice, an accounting firm, or a law firm.

For example, in an accounting or law firm, you might incur meal expenses in developing new client relationships. You might also incur auto expenses for getting to and from client meetings, pay for professional publications and continuing education, and incur home-office expenses.

What’s the federal income tax treatment of such expenses? Good question. Read on for the answers.

Key Question: Reimbursable or Not?

As long as the expenses are of the type that you, as a partner, are expected to pay without reimbursement under the partnership agreement or firm policy (written or unwritten), you can deduct allowable expenses as deductible business expenses on Schedule E of Form 1040.1

But you cannot deduct expenses ... Log in to view full article.