Let’s say you dissolved your corporation, and then some unexpected corporate expenses arrived. You paid them personally because the corporation was no longer in business.
Guess what? No deduction. The corporation can’t pay the expenses because it no longer exists. The owner can’t pay the expenses and then deduct them because he didn’t incur those expenses inside a business that he operates in his personal name. If you are going to shut down your S corporation, consider keeping the business open for an extra period of time to ensure you receive all income and pay all expenses, or make sure to resolve all potential accounts payable prior to closing the business. Since you incur costs for keeping the S corporation open (tax return filings, state franchise taxes, etc.), you need to weigh the additional costs against any lingering accounts payable or other expense issues that could arise. If you are considering shutting down your S corporation, let’s talk before you do it. If you would like my help with any of these steps, please call me on my direct line at 262-358-8297. |
We're Here to HelpGet advice from our experienced network of financial managers. If you Value our Blog, We have an ask.We spend hours researching data to help you understand your finances and taxes, including historical context, issues, and solutions. Our goal is to empower people to improve their relationship with money. Please consider a $3 donation today. Important Disclosures
Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances. AuthorKeana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients. |