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Tax Deduction Consulting: S Corporations Helena MT

In other words, deductions on an S Corporation are no different than any other allowable business expense and are subject to the same limitations and documentation requirements of any other business entity.

John Shellenberger
P.O Box 4758
Bozeman, MT
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Company: Estate Conservation Associates
Education
Franklin & Marshall College A.B.
Stanford University M.A.
Years Experience
Years Experience: 34
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Supplemental Medicare Insurance,College Planning,401k Rollover From Employer,Income for Life/ Preserve Principal,Medicare Planning,Annuities,Alternative Asset Class Planning,Investment Consulting & Allocation Design,Insurance & Risk Management Planning,Retirement Income Distribution Planning,Education Funding & Financial Aid Planning,Fee-Only Comprehensive Financial Planning,Long-term Care Insurance,1031 Exchanges,Wealth Engineering,Stock Market Alternative,Wealth Management,Life Insurance,Inves

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H&R Block Inside Russell Square Shopping Center
(406) 251-6020
1132 SW Higgins Ave Ste 210
Missoula, MT

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Judd Accounting Service
(406) 495-1178
3203 Rawhide Ct
Helena, MT
 
Rowsey Charity CPA
(406) 442-1040
828 Great Northern Blvd
Helena, MT
 
Olsen George S CPA
(406) 442-5520
111 N Last Chance Gulch
Helena, MT
 
Campbell and Associates,CPAs
(406) 728-9288
2505 S Russell
Missoula, MT
 
H&R Block
(406) 727-3577
7353 Goddard Dr Bldg 1150
Malmstrom Afb, MT

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Blessinger Mark CPA
(406) 442-5520
111 N Last Chance Gulch
Helena, MT
 
Rulon Marlys CPA Cva
(406) 442-5520
910 N Last Chance Gulch
Helena, MT
 
Minnehan-Galt Kelly CPA
(406) 442-1040
828 Great Northern Blvd
Helena, MT
 
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Tax Deduction Consulting: S Corporations

Deductions on an S Corporation

In order to understand the deductions on an S Corporation, it is necessary to understand the basic tax structure the S Corporation and how it differs from other corporate entities.

An S Corporation is a corporate entity that has elected to be taxed under the provisions of Subchapter S of Chapter 1 of the Internal Revenue Code. This allows the corporation to avoid paying taxes directly on its profit, but rather to pass the profit on to the shareholders who pay the taxes on their individual income taxes. S Corporations are limited to corporations with less than 100 shareholders which normally, but not necessarily, makes them small business entities. The deductions on an S Corporation are obviously treated differently than on a normal corporation.

Although the deductions on an S Corporation are treated different for tax purposes, this is really more a matter of how the tax is computed and even more importantly how the actual tax filing is done. In a non-S Corporation, the forms that are filed treat many business expenses as deductions from the taxable profit. Since the profit in the S-Corporation is going to be distributed to the stockholders and filed as income on their individual Form 1040s, the cost of doing business expenses are considered just that, expenses, rather than deductions.

The items that would appear on a list of allowable corporate tax deductions are really just the costs associated with doing business such as insurance and travel expenses. These appear on a profit and loss statement in a slightly different form in the S Corporation. They need to be deducted from the actual income of the Corporation before the distribution is made stockholders. Since they are deducted from the income on the accounting statements of the Corporation, they are still not taxable profit regardless of the type of corporate structure.

In other words, deductions on an S Corporation are no different than any other allowable business expense and are subject to the same limitations and documentation requirements of any other business entity. The only difference that really exists is how they appear on the actual filed tax returns. The S Corporation will, ultimately, be calculating its "real" or "retainable" profit in the same manner, but the profit will be passed on the stockholders who will then enter it as income on their individual tax returns.

The individual stockholders, of course, will be able to reduce their tax liabi...

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