S Corp - What Can I Deduct
I've recently set up my real estate investment operations as an S Corporation.
Any body have good advice on what to (and what not to) deduct?
Anybody ever been in trouble for deducting too much? What about deducting questionable grey area items - like a personal/business car?
What good reads are out there on the subject?
All advice appreciated.
Your accountant can tell you everything.
Lemme make it simple. In my business I Deduct everything I spend in the "activity" of doing business.
As my accountant says "you can overstate your deductions but never understate your income"
in other words IRS can disallow a deduction but understating your income can land you in jail. So the worst that can happen is that you would owe a little more for not having as many deductions but you wont go to jail over it.
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B.G. & Wheeler D. LLc Inc.
(A division of: Half Vast Enterprises)[ Edited by WheelerDealer on Date 01/09/2004 ]
Has anyone ever written off alot of grey- area personal expenses, such as dinners and travel, to the business.
(My wife is VP, and we talk business most of the time when we go out.)
A good accountant will suggest that you limit that sort of 'junk' deductions as much as possible. Too many 'grey' area deductions puts up a big red flag for audit by the IRS. And just because you talk about your business at dinner doesn't make it a business dinner.
As far as auto deductions and the like, again, your tax advisor is the best place to start for asking advice on this (if you don't have one, it's in your best interest to get one). Personally, I'd like the company "buy" the auto, and have it as a company perk for the pres. to drive a company car. It doesn't hurt also to put an advertisement on the vehicle. That way, it's and advertising deduction any time you get into the car.
Again, your tax advisor should give you a list of what to deduct, how much, and how often. Your accountant shouldn't be there just at tax time.
Roger
Find an accountant familiar with the RE business and that is PROACTIVE. Most (no offense intended here) tend to "count the beans" and not creatively approach your strategy. We kept our CPA but hired a true "tax advisor", who works with the CPA.