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Author: ripwest Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121185  
Subject: Re: Sub Chapter S Corp & DOG food deductions? Date: 5/18/2001 2:01 PM
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Why would personal expenses ever show up for the corporation (deductable or not)?


They would show up if they were paid on the corporate checking account, which is what I thought your original question stipulated. The corporation must account for all expenditures, deductible or not.


If $8,000 of the expenses included $5,000 of wages, shouldn't the $1,000 in personal dog food expenses be invisible to the corp? Wouldn't it just come out of wages, at the personal level?


Again, it wouldn't be invisible to the corp if paid out of the corporate bank account. If not paid out of that account, why even bring the question up in relation to Sub S?

If the dog food is paid out of personal funds, then the source could be, as you say, wages. It could also be interest income, dividends, a gift or any number of things. I don't think the source is important.

I still feel that we are missing something here. Originally, you said..

Personal expenses, such as personal auto miles, lawyer fees for a divorce, debt payments to visa for old/personal debt, non-business related food expenses, and dog food should be deducted from wages, AFTER federal income tax is paid.


Deducted for what purpose? Why 'AFTER federal income tax is paid'? Are you referring to the accounting for personal expenses in your personal personal statement of receipts and disbursements?

One more time. If the sub s pays a salary, it is deductible by the corp, and income to you. If you receive the salary in your personal bank account and make non-deductible expenditures, so be it. It has nothing to do with your sub S corp. If, on the other hand, the corporation made the non-deductible expenses, these have to be accounted for in the records of the corporation.

Rip

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