Can you deduct the standard deduction and health insurance premiums?
My buddy and I own an LLC (taxed as an S-Corp). Can you deduct business expenses (such as phone) and health insurance premiums AND the standard deduct...
My buddy and I own an LLC (taxed as an S-Corp). Can you deduct business expenses (such as phone) and health insurance premiums AND the standard deduction?
Also, do distributions/dividends have to be distributed equally (if we each own 50%, per say) can he take 60%, and I take 40% of distributions?
Thanks in advance.
Pick one.
The standard deduction is on your personal return and has nothing to do with your partnership return. So yes, you can take the business expenses on the business return and still take the standard deduction.
Please HIRE someone to do your taxes.
Any health care premiums paid by the S-corp are added back to your W-2. You can then claim them as self-insured on the front of the 1040. If you DID NOT have the premiums paid through the business, you can only deduct them on the schedule A (itemized).
Cell phones are not a business expense. EXTRA charges for long distance (which most cell phones do not charge extra for) should have been reimbursed by the business and deducted on the S-corp return.
As for unequal distributions. 50% owner gets 50% of the profit. Any inequity due to working for the business should have been address by differing salaries on the W-2.
if you didn’t issue yourself a W-2, you need to fix this.
Judy is absolutely correct. And I agree with the tax lady…Hire a trained tax professional to prepare your tax returns!
Tax law can be complicated, especially when preparing business tax returns. The questions you ask are GREAT questions – most people don’t even know what to ask. These also show that you have much to learn about preparing tax returns.
If you want to learn how to prepare your own tax returns, sign up for a class, like those provided by H&R Block (classes begin around August or so). If nothing else, you just might realize that it’s WORTH it to pay a trained tax preparer. You’ll gain an understanding of tax law, which can be useful to your business throughout the year & may save you $$ both is planning & when you take your books to a CPA or tax preparer. But for 2009 I strongly recommend you hire a trained professional. You can try your hand NEXT year. =)
http://www.hrblock.com/taxes/planning/tax_courses/new_students.html