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Old 01-13-2009, 06:57 PM
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Retroactive expense claiming for new S-Corp

HI Tax Guru

Absolutely love the site however havent been fortunate enough to find an answer to the following to date:-

I am;-

- currently unemployed (Jan 09) claiming CT unemployment benefit
- will be paying private course fees in March 09 for coaching for a new business as an ADHD Coach
- registering an S-Corp in Jun 09

Can I continue to claim unemployment until I register the S-Corp and then in the first tax year of the Corp, claim expense for the course fees (dated March 09).

In my opinion..Im out of work, re-educating for later in the year and think there should be no reason why I cannot claim considering there is no income other than unemployment....however I´m not aware whether the IRS will see it in the same light

your advice and help appreciated

best regards



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Old 01-14-2009, 11:34 AM
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I would check with your local Unemployment Office, as each State has its own rules and regulations pertaining to the Unemployment Benefit eligibility.

With respect to being able to claim the expense for the course fees dated March 09 against the Corporation being established in Jun 09, I generally think this is not allowable by the tax law. If the amount is substantial why not form prior to Mar 09? Also, the more pertinent question is whether or not the training expenses itself is deductible?

The IRS has stringent rules allowing the deductibility of training expenses, check with your CPA to ensure that you meet these requirements.

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Old 01-18-2009, 11:12 PM
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just a comparison of my situation.

i opened my s-corp in feb 2008., made no income
had a w2 paying job at an employer
lost job in june 08., filed for unemployment

on my unemployed income request,. i had to state entities owned., i listed both a sole prop and a s corp., i listed i made no money.,

the unemployment office asked me to clarify that i made no money.,i was awarded unemployment income benefits.

so it appears owning a s-corp that makes no money., or makes a little money., may or may not effect ur unemployment stuff..

also... as far as reeducation., on your personal w2., you may be able to deduct that as an expence when you were unemployeed... so i dont know how that would play into your s-corp... i may not even have to.

Quote:
Originally Posted by ej122493 View Post
HI Tax Guru

Absolutely love the site however havent been fortunate enough to find an answer to the following to date:-

I am;-

- currently unemployed (Jan 09) claiming CT unemployment benefit
- will be paying private course fees in March 09 for coaching for a new business as an ADHD Coach
- registering an S-Corp in Jun 09

Can I continue to claim unemployment until I register the S-Corp and then in the first tax year of the Corp, claim expense for the course fees (dated March 09).

In my opinion..Im out of work, re-educating for later in the year and think there should be no reason why I cannot claim considering there is no income other than unemployment....however I´m not aware whether the IRS will see it in the same light

your advice and help appreciated

best regards



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Old 01-19-2009, 12:32 AM
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Thank you Zxed, this has been a common question being asked today as there are many consulting companies with Single Owners who are having problems receiving assignments.

These S corporation owners are not taking a salary and now filing for unemployment benefits. Some states are being lenient whilst other states are not granting these benefits. We have not consistently found that the owners filing for unemployment claims have been successful.

But, experience shows that if S Corp owners are really not receiving a salary or taking a dividend distribution as the S Corporation is not making any monies, then there may be grounds by which States are granting unemployment benefits to the extent that there were prior wages paid and adequate state unemployment taxes were paid.

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Old 01-20-2009, 12:02 AM
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you are welcome.

It is also important to understand that even states that are usually lenient, will try to not pay unemployment benfits if they can get an easy way out.

with the state of the current economy and state resources,. with the mass layoffs we are reaching a state where the insurance payability of a state is coming to a stop..

Im in CA, unemployment benefit fraud is very common, but i got lucky with my unemployment timing., it was still early-mid 08., things were not as bad as they did towards the end of 08/now.


Quote:
Originally Posted by TaxGuru View Post
Thank you Zxed, this has been a common question being asked today as there are many consulting companies with Single Owners who are having problems receiving assignments.

These S corporation owners are not taking a salary and now filing for unemployment benefits. Some states are being lenient whilst other states are not granting these benefits. We have not consistently found that the owners filing for unemployment claims have been successful.

But, experience shows that if S Corp owners are really not receiving a salary or taking a dividend distribution as the S Corporation is not making any monies, then there may be grounds by which States are granting unemployment benefits to the extent that there were prior wages paid and adequate state unemployment taxes were paid.



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