Posted on 01/21/2013 7:44:02 PM PST by Jaguarmike
Any of you guys (or ladies) self-employed, and have your own S Corporation? What kind of tax deductions are you allowed to take?
I have an accountant, and he's going over all of my deductions, but I'm trying to find more. For example, I pay for my health insurance - and the accountant says that tax deductible. So it stands to reason that my prescription medication (which I pay for out of my own pocket) should be tax deductable too.
deduct all liquor and tobacco tax paid... oh, hell deduct the whole thing as a medical expense.
If your account can;t also handle your taxes then you need other help.....
Set up an account called “employee benefits.” Put everything in there from health care to your gym expenses to visits to the massage parlor.
Also - do you have a self-directed 401K? The minimum amounts you can put in that are very high.
“It stands to reason,” you contend. But tax law comes from the Congress and is very much not reasonable to the rest of us. For example, the deduction for health insurance, if you qualify, probably originated as an inducement to certain health-insurance companies, intended for their profit, almost certainly at the expense of other medical financing arrangements. Those health-insurance companies in turn almost certainly donated lavishly to Congressional campaigns, an incidental fact totally unrelated (in Congressional parlance) to this very profitable inducement. But that doesn’t apply to pharmaceutical companies, so it doesn’t follow that you can deduct the cost of your prescription drugs.
Unfortunately, Congress is still writing the latest tax law for last year. But you can read the totality of the corpus by just typing “26 USC” into any search engine. It’s only a little more than 28 megabytes of text. That text, however, often only vaguely directs various government officials to issue regulations. Those regulations, if actually issued, you can find in “26 CFR.”
Good luck! I’m far too stupid to understand the tax code, and I lack the benefit of election to the Congress. But I’m an idiot and a bad American. By the way, I happen to think that drastic simplification of the tax code and unambiguous elimination of filing and payment requirements could encourage entrepreneurship, which might stimulate the economy. But then again, I repeat myself: I’m an ignorant, stupid idiotic bad American.
Your health insurance premiums are deductible to the business. Prescriptions are not. They should be deducted on your personal return. The key with an S-corp is to reduce your net income as much as possible so that your personal tax return shows less income.
First of all, you need to understand thoroughly that you and your S corporation are two distinctly different persons under the law—even if you own all the stock in your S corporation. Your S corporation may deduct all ordinary, necessary, and reasonable business expenses (Section 162(a)) unless specifically prohibited or limited by a different provision in the law. For example, a business may deduct only 50 percent of business meals and entertainment costs (Section 274(n)). If you corporation pays your health insurance premiums, it may deduct such premiums as a benefit for its employees under Section 162. However, the benefits are wages income to you (but not subject to Social Security tax or Medicare tax), but then you may claim a deduction for such premiums in calculating your adjusted gross income (AGI) on page 1 of your Form 1040. If your corporation has a health reimbursement account (HRA) it could deduct the reimbursement of uninsured medical expenses that it pays to you and you could exclude them from your gross income. Other great ways to shelter medical expenses are the use of a Section 125 plan or health savings account. Each of these plans can be complex, so you should consult an expert in setting any of them up.
Get another tax person.
A well written / structured corporation, can be a god sent. Both for protection (personal liability) as well as the business side of things.
You may want to ask the lawyer / attorney to insert what is called a "charging order" into your "Articles of Incorporation." If the lawyer / attorney ask's what do you mean, move on to another, that's not the person. I could e-mail you a VERY STRONG (IRON CLAD) "charging order" made by a prominent lawyer / attorney.
If your business is doing fair to very well, you also need to setup a holding company (another corporation) to hold and lease to the "S-Corp" cars / trucks / tools/ building/ etc. The second company offers another veil of protection, in case of a lawsuit, and they successfully pierce (via a lawsuit) the first corporate veil. The "S-Corp should not own even a pencil," lease everything from the holding company, even the pencil(s), at a fair and equatable price, of course.;-) wink, wink.
Nothing in this response, should be considered "Legal Advice." Only a lawyer / attorney can give "Legal Advice," my statements are only that of political speech & opinions. Nothing more, nothing less. Now I'm covered. :-)
My tax return I just received my tax return for 2011 back from the IRS. It puzzles me!!!
They are questioning how many dependents I claimed.
I guess it was because of my response to the question: “List all dependents?”
I replied:
12 million illegal immigrants;
3 million crack heads;
42 million unemployed people on food stamps,
2 million people in over 243 prisons;
Half of Mexico; and 535 persons in the U.S. House and Senate.”
1 useless President.
Evidently, this was NOT an acceptable answer.
I KEEP ASKING MYSELF, WHO DID I MISS?/i
I guess it was because of my response to the question: “dependents I claimed."i
Go ask a tax professional
I just became aware that if you lose your job and cant pay your mortgage better hurry and push foreclosure you have until dec 2013 for tax forgiveness, after that , even if you qualify for the insolvency clause forgiveness the feds and state WILL TAKE YOUR PENSION if you have one to cover the tax on the forgiven amount of the mortgage , whether it is being drawn or not .
LOSE YOUR HOME: LOSE YOUR PENSION (or any other assets)
bookmark
Bump.
Become a democrat they don’t pay taxes,see congress.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.