My wife and I are the only shareholders in an S Corporation that is struggling to stay afloat. I have personally paid bills for the S Corporation in a attempt to keep it going. How do I claim these on taxes ( either personal or corporation).

Depends on how you do your bookkeeping. If you use an accounting software, then you should create a petty cash account and enter the business related expenses in this account. At the end of the year, you can either balance the account to zero posting to an equity account - either post against draws or investment by stockholder.

Keep a track of these expenses and at the end of the tax year have your CPA make an adjustment to the books to reflect that these business expenses on the tax returns with the offset entry shown as a loan from officer.

Thus, in reality you are lending monies to your S corporation (you now have basis) and these expenses would create a loss on the corporation tax return. These losses would be reflected through a K-1 on your personal tax return, (since you have basis through loan to the S Corporation) you would be entitled to deduct these on your personal tax return on Schedule E.

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Thanks so much - I thought this was how to handle it but I was not sure.