What can I write off on my taxes as an S-Corp?

The 13 Most Common S Corp Tax Deductions

  1. Going into Business Expenses. The costs of getting a business started are capital expenses, which must be deducted over the first five years you are in business.
  2. Auto Expenses.
  3. Professional Fees.
  4. Bad Debts.
  5. Business Entertaining.
  6. Travel.
  7. Advertising and Promotion.
  8. Education Expenses.

What deductions should be pre-tax?

Pre-tax deductions: Medical and dental benefits, 401(k) retirement plans (for federal and most state income taxes) and group-term life insurance. Mandatory deductions: Federal and state income tax, FICA taxes, and wage garnishments. Post-tax deductions: Garnishments, Roth IRA retirement plans and charitable donations.

How do S corporations avoid paying taxes?

If you sell your home to your S-corp, you can avoid taxes on the sale with home-sale exclusion of $250,000 gain (which can be $500,000 if you are married). This arrangement will also increase the rental property’s depreciable basis, which lays the foundation for greater depreciation deductions in the future.

Is payroll deductible for S-Corp?

Unlike the benefits costs paid by W-2 employees, which are pre-tax deductions in payroll, benefits paid by an S Corporation for its owners (any shareholders who own more than 2% of the company) are considered part of the owner’s taxable wages, and aren’t deducted in payroll.

Can my S-Corp pay my mortgage?

A corporation cannot pay an employee’s mortgage as a fringe benefit because it is not a typical business deduction the employee would incur on his own, according to the IRS.

Can an S-Corp write off a car?

Even though interest on a car loan appears in Section 163 of the tax code as a deductible expense, you cannot receive tax-free reimbursement from the S-Corp for this expense. However, the S-Corp can still deduct the expense, and you can receive reimbursement for loan interest, but it must be done as a wage payment.

Is it better to contribute pre-tax or after tax?

You may save by lowering your taxable income now and paying taxes on your savings after you retire. You’d rather save for retirement with a smaller hit to your take-home pay. You pay less in taxes now when you make pretax contributions, while Roth contributions lower your paycheck even more after taxes are paid.

Is it better to do pre-tax or post tax?

Contribution amounts also get taxed during future withdrawals. Even so, pre-tax deductions are often the better choice when employees need to save more quickly. Post-tax deductions offer employees the advantage of higher take-home pay. This higher pay is because individuals have already paid taxes on contributions.

Who pays more taxes LLC or S-Corp?

Who pays more taxes, an LLC or S Corp? Typically, an LLC taxed as a sole proprietorship pays more taxes and S Corp tax status means paying less in taxes. By default, an LLC pays taxes as a sole proprietorship, which includes self-employment tax on your total profits.

Should I pay myself a salary from my S corp?

If you have an S corp, then probably the most relevant IRS regulation for you is that if you’re a shareholder-employee, you must pay yourself a “reasonable” salary.

Can my S corp pay my mortgage?

How many years can an S-Corp show a loss?

The IRS will only allow you to claim losses on your business for three out of five tax years. If you don’t show that your business is starting to make a profit, then the IRS can prohibit you from claiming your business losses on your taxes.