S-corp salary

[AlexDDS]

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.

[Crazyroadtodublin]

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

[jfoxcpacfp]

AlexDDS wrote:

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.

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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".

[AlexDDS]

Thank you.

[Crazyroadtodublin]

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

[jfoxcpacfp]

Crazyroadtodublin wrote:

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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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.