| S Corporation Start up tax questions Let me answer each of your questions as follows:
1."For my s corp, im supposed to be paying myself since i work on the software? do i have to?"
You as an offficer owner of an S Corporation are not required to a take a salary if you do not have the revenue or profit to sustain this salary. So, do not worry if you have not taken a salary.
2. "Can i pass the entire loss of the s-corp to the shareholder, me? primirally the incorporation fee's that i paid?".
Yes, you can pass the entire loss (expenses incurred as the incorporation fees) that is taken on Schedule K-1, through to your individual tax return.
3. I plan to eventually close down the sole prop and deal with only the s-corp., which is why i am hesitant to leave the laptop exp as the s corp exp., even though i use the same laptop for my sole prop.
No impact here, the laptop has Zero basis and you cannot deduct a laptop with zero basis on the tax return of the S corporation. It has already been fully depreciated on the Schedule C.
4. When forming the s corp, i had setup the shares for the business, on "paper" should i be balaning the books, showing that i paid for the shares? or should i leave the starting line as $0, and show my credit card payments as personal loan transfer from shareholder? so that i can pay myself for that later?
Always show the capital amount as the amount that you used to initially form the corporation, that is the incorporation fees. The cost of the incorporation is an asset and is reflected as an Asset under the heading Other Assets on the balance sheet and offset as a Capital invested into the business. This is a better treatment as the loan from officer to start the corporation implies you did not properly capitalize the corporation. |