Thinking About Loaning Cash to Your Business?
Are you looking to start a business, or is your current business in need of some cash? Maybe you can’t get a loan from a bank, or maybe you would rather not use a bank. What about lending some of your own money to your company? Can you do that? Yes, you can, but you’ll need to make sure you do it right.
The first thing to be aware of is the need to document your transaction properly. If you decide to loan your business cash in order to purchase more inventory but your company defaults on the loan then you might be able to write the loan off as a business bad debt instead of a loss from an investment.
A business bad debt is helpful because it can help offset other ordinary income like interest and dividend, and W-2 income. It can also serve to create a net operating loss on your individual return in the event that your income is not high enough to offset your business loss.
There are many other aspects of lending money to your corporation and important steps you should take in order to do it right. You can learn more about the process of lending money to your corporation by clicking here. If you would like to speak with us personally then give us a call at 1-877-CPA-2006 or click here to contact us.
Six Facts About the American Opportunity Tax Credit
Six Facts About the American Opportunity Tax Credit Many parents and college students will be able to offset the cost of college over the next two years under the new American Opportunity Tax Credit. This tax credit is part of the American Recovery and Reinvestment Act of 2009. Here are six important facts the IRS…
Small Businesses, Bite a Chunk Out of Your Taxes!
Small Businesses, Bite a Chunk Out of Your Taxes! A tax savvy entrepreneur like yourself probably knows that maximizing your deductible business expenses lowers your taxable profit. After all it is how much money you have left in your pocket that sometimes matter. Here are some deductions which may help you take a bite out…
Tax Strategies for the Wealthy: Qualified Personal Residence Trust (QPRT)
Tax Strategies for the Wealthy: Qualified Personal Residence Trust (QPRT) Wealth management is an important issue for those with substantial assets to protect. Many people incorrectly assume that their estates will escape federal estate tax as a result of underestimating what their principal residence will be worth when they die. Often, our homes are our…
Making Your Medical Deductions Count
Making Your Medical Deductions Count April 15th is almost here and if you are owing tax it may pay to take a second look at that return to see if you claimed all medical deductions you are entitled to. Your diligence in keeping track of expenses will pay off. IRS Publication 502 has a complete listing…