Business Deductions
Hi all,
I have a newly formed S corp. My taxperson told me that the over $5000 that I spent on RE courses and a RE salesperson class are only allowed as personal deductions.
I argued to her and her boss (to no avail) that these should be business deductions.
Isn't this wrong???
Thank you,
jdflybuy
Why are you arguing with your accountant about what is their area of expertise?
Other than that, since it is an S corp, it shouldn't matter right now whether it is a business deduction or a personal deduction unless you have more than one shareholder in your S corp.
I am assuming you paid for these training events from the company bank account. If that is the case, I would think they should be deductible training expenses to the company, but I am no tax pro. If your newly formed S Corp was created after you took the courses they are most definitely your own expenses. If you paid for them personally and you were already "employed" by your S corp, you may see if you can "submit" a reimbursement request to the company for what you paid for training and then have the company account cut you a check when you approve your request., but you should run this by your accountant first.
thanks for the info, info.
JD
Any business can deduct up to a certain amount of educational expenses. However, I think that the limit is closer to $500-$1000 and I am very unsure of this information, but look into it, let us know when you find out.
In the meantime you can deduct them as professional services if you itemize your tax return (I assume you own your own home, and do itemize).
Best of luck
Sam
Remember you can fill out the IRS forms any way you want, you can deduct cat food if you wish.... Just remember that while you can deduct anyting you want, be prepared to show reciepts and be able to justify it to an IRS auditor.
If you can't convince your tax pro, then how will you convince a tax auditor?
Sam
Maybe you could characterize the courses that you purchased as "software" or "legal documents". That may get around any "educational" expense issue.
Also, have you tried reading through IRS publication #535 regarding Business Expenses? It talks about it on pg 55. It also refers you to publication #970. Starting on about page 53, it talks about educational expenses.
After reading through those sections and talking with your accountant again, let us know what you think.