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  • S-corp salary

    If S-corp has a cashflow problem , can you still pay yourself 265k in salary by using personal funds or line of credit and carry S-corp losses to your personal tax return or to next year S-corp / personal tax return?
    Thank you.

  • #2
    Did this with a line of credit accountant said it was fine, personal funds would be "frowned upon"

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    • #3




      If S-corp has a cashflow problem , can you still pay yourself 265k in salary by using personal funds or line of credit and carry S-corp losses to your personal tax return or to next year S-corp / personal tax return?
      Thank you.
      Click to expand...


      There is no problem with contributing personal funds to the business - just create a trail that the IRS can follow. iow, the money goes in as a loan or capital contribution and comes out as a payck. I think this may have been what Crazyroadtodublin's accountant was talking about. LOC is fine, too, just make sure the money flows in and out as it would for a business you didn't own - "arm's length".
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        Thank you.

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        • #5
          Correct and if the loan is for an "extended time " interest will need to be charged...prob more of a hassle than its worth

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          • #6




            Correct and if the loan is for an “extended time ” interest will need to be charged…prob more of a hassle than its worth
            Click to expand...


            Actually, the rule is that if you owe $10k+ (or the business owes you that amount) at the EOY (when you report on your income tax return), you are required to report using the federal AFR tables.
            Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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