Do i include money i loan my business as part of the total income or put it seperately somewhere else

[davstav]

i loaned my business some money how do i report it

[MinhT · Accepted solution]

Money that you loan to your business (partnership, LLC or S-Corp) is not counted as income of your business. It is only reported on the balance sheet of the business as a loan from members (or shareholders).

If the loan bears interest, it is a business expense for your business. And you must report this interest income on your personal tax return.

[danielsjrd]

ok, so how do i account for the money loaned to the llc or is there a way to get a credit for the money loaned??

[tagteam]

---

@danielsjrd wrote:

ok, so how do i account for the money loaned to the llc or is there a way to get a credit for the money loaned??

---

You do not get "credit for the money loaned" in the form of an income tax deduction. Rather, your loan to the LLC (assuming it is a multi-member LLC) is really nothing more than a balance sheet entry (an entry for loans from partners and cash).

[Kiwii]

When this is repaid to the individual how do you avoid paying taxes on it again. ie: my after tax income dollars from my job went toward setting up my new business and now the business is making money and I want to pay it back. To pay it back as income to myself through the business would then be taxed income tax again. Is there a way to enter this as more of a loan without interest?

Thanks

[ThomasM125]

Unless you are a "C" corporation, you pay tax on the business income through your personal tax return. A distribution to you from the company is not taxable to you, so there is no double tax.

The only time it may be taxable would be if you took more out of the company than what you put in plus the income generated by the company. In other words, you can take out your profits without them being double taxed.

[lrinco]

The Employee Retention Credit has totally changed my tax profile and I'm confused. My S corp usually pays for my car and other costs. Now my S corp income is MUCH lower, but I have this Employee Retention Credit that needs to go out of the S corp as W2 pay. Am I stuck with a much higher W2 income along with much lower overall income? Can I loan my S corp money for the car and other costs?