s-corp accouting questions....

Even though you can do your own corporate taxes with turbotax you probably missed some important tax savings. You could ask in a tax newsgroup such as news:misc.taxes.moderated or in a yahoo.com tax forum but your best bet is to talk with a local tax professional, the money spent will be worth it

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"Mark Enriquez" wrote

Under Section 129, yes / maybe. Any deduction allowed would be limited to wages paid with a $5000 cap. The plan must be in writing, and can not favor highly compensated employees (a technical term generally meaning the owners). You may want to check this out

Auto expenses would be a line item under Other Expenses. Just list it out with all other expenses that don't fit any specific line on the return.

Wonderful. You still have to pay taxes on the business profits.

As your net profits rise, you should start take a portion of what you pull out as wages (on a W-2). If you don't the IRS - may - reclassify some or all of what you take from the business as wages and hit the business with the tax it should have withheld and paid. Some places suggest that ~any~ amount withdrawn should be in the form of wages, but this just ain't so in every case.

So, make up some loan payments with a payment schedule and follow that to-the-letter (+ interest)....like any bank loan. Any additional amounts should be in the form of salary or wages which can be a fixed salary, an hourly rate, or some other reasonable blend to obtain the amount of wages to report on the W-2. The reason for the defined loan repayments, and the defined wages/salary system is that any extra could than be distributions of profits. You have created a defendable position on the loan repayments, and a defendable position on the salary/wages taken.

First of all, thanks, Paul, for your time and effort in assisting me with these issues. Your knowledge is of great help to my efforts with this "project"....

"Paul Thomas, CPA" wrote in news:AWDKf.4103$ snipped-for-privacy@bignews6.bellsouth.net:

Yes this is what I thought...I argued this point last year with my accountant and he never really agreed with my take on it. He ended up declaring all of our day care as distribution income.

Great that's that...but is there any sort of deduction for it?

We will be more then happy to do that when our business actually *shows* a year end profit. Right now with start-up depreciation we are still well below the profitable line.

The loan repayment schedule/document is a VERY good idea, and I will begin work on it ASAP. We have decided that this year we want to begin showing W-2 income in order to get our Child Credit from Uncle Sam, so the defined loan/wage "contract" is a good way to get that started.

Again, thanks Paul!

- mark

"{ { {{ IN STEREO }} } }" wrote

If you are expensing the business miles (and it would be great if you actually reimbursed yourselves from the company so there is a check) the rate last year was split. 40.5 cents per mile from 1-1 to 8-30 and 48.5 cents per mile from 9-1 to 12-31.

Take the business miles and do the math.