SheckyS01

Member
Joined
Sep 14, 2021
Messages
20
So, I just got my shiny new S-Corp set up and got my corporate book and everything. And I got a bank account for it. And I'm about to buy an existing business.
What are the rules on business expenses?

Most people I've talked to seem to agree that you can lease a car through your S-Corp and that's fine, assuming you use that car to drive to and from your business/office. I already own my car outright, though, and I'm not eager to lease. Can I buy my car insurance through the business?

What about health insurance? I was working for a company and had health coverage and now I will have to get Cobra benefits or buy my own insurance. Can the company buy that for me?

I have an Amazon Prime account for my personal use. Do I need a separate account for the business (assuming the business orders stuff for the business through Amazon)? If I have one for the business and use it for personal use, am I gonna get in trouble with the IRS?

If I do work at home, like paperwork, or advertising online and use my home computer, presumably I can claim part of the cost of the computer as a business expense? What about electricity?

What about my personal cell phone? I'm going to use that for business texts and phone calls. So can I charge that to my corporation?

Is there other, obvious stuff I am missing?
 

Dora Wi

MVP
Joined
Aug 19, 2020
Messages
88
Do you have the opportunity to consult with an accountant? Sometimes what counts as a business expense can be a bit vague, a lot of it is up to interpretation, and it also depends on the specific regulations of the area where you live, but a good accountant should be able to help with specific questions.
 

OSC

Member
Joined
Oct 27, 2021
Messages
3
So, I just got my shiny new S-Corp set up and got my corporate book and everything. And I got a bank account for it. And I'm about to buy an existing business.
What are the rules on business expenses?

Most people I've talked to seem to agree that you can lease a car through your S-Corp and that's fine, assuming you use that car to drive to and from your business/office. I already own my car outright, though, and I'm not eager to lease. Can I buy my car insurance through the business?

What about health insurance? I was working for a company and had health coverage and now I will have to get Cobra benefits or buy my own insurance. Can the company buy that for me?

I have an Amazon Prime account for my personal use. Do I need a separate account for the business (assuming the business orders stuff for the business through Amazon)? If I have one for the business and use it for personal use, am I gonna get in trouble with the IRS?

If I do work at home, like paperwork, or advertising online and use my home computer, presumably I can claim part of the cost of the computer as a business expense? What about electricity?

What about my personal cell phone? I'm going to use that for business texts and phone calls. So can I charge that to my corporation?

Is there other, obvious stuff I am missing?
Hi Dora Wi!
Under no circumstance, pay personal expenses as your business expenses. Keep your personal accounting apart. You do not want issues with IRS, do you?
You can only consider legitimate business expenses that naturally result from your business activities.
You can buy stuff and subscribe as owner's capital for your S-corp. (You can also draw money from the business but keep the records).
Everything that goes inside your business balance comes from one place: either your capital or somebody's else funds.
Consider your accounting system. The first step is a valuable char-of-accounts—no need to get scared.
Good luck.
Let me know if I can be of any help.
 
Top Bottom