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.
Hire a Pro or Do it Yourself – the Best Way to File Taxes
Does it feel like you just finished last year’s taxes? Well, believe it or not it’s almost time to do it again. Every year the tax laws and policies change, so each year you will have to be aware of these changes and additions. However, there are some things that never seem to change. With…
These Four Investing Mistakes Will Hurt You
These Four Investing Mistakes Will Hurt You The world is full of failed investors who entered the investment ring with high hopes, only to be knocked around like a Mike Tyson opponent in his prime. Investing is a risk, but there are several steps you can take to mitigate those risks. On the other hand,…
Could the “Rich Person Roth” Be Right for You?
Could the “Rich Person Roth” Be Right for You? The world is full of failed investors who entered the investment ring with high hopes, only to be knocked around like a Mike Tyson opponent in his prime. Investing is a risk, but there are several steps you can take to mitigate those risks. On the…
Effective Leaders Share These Seven Important Skills
Effective Leaders Share These Seven Important Skills If you want to become an effective leader then you have to develop certain skills. The skills you need to be successful might vary from what someone else needs. However, in order to become a good leader you have to be able to teach, direct, correct, and continue…