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nukesun13
New Member

Closed S-Corp with existing Credit Card debt I am personally paying

I closed my business March 31, 2020, but only the Dba. The Incorporation name is still active as I want to use the Incorporated name for something else, but still have Credit card debt associated with the Dba I closed. I am currently still paying off those credit cards as assets were not enough to cover.  Can I write those off on my taxes, and how long can I write off for?  

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2 Replies

Closed S-Corp with existing Credit Card debt I am personally paying

As long as you have a valid S corporation election in effect, a return (1120-S) must be filed with the IRS.

 

See https://www.irs.gov/instructions/i1120s#idm140355079064496

 

If you have an accountable plan, you can pay the expenses, the corporation can reimburse you for those expenses and then deduct them on its return (the K-1 you receive will reflect those expenses in the form of a business loss, most likely).

MinhT1
Expert Alumni

Closed S-Corp with existing Credit Card debt I am personally paying

The credit payments cannot be deducted as business expenses. Your credit card balance is due to expenses you charged to the credit card.

 

If those expenses charged to the credit card are business expenses then you can deduct these expenses in the tax year you charged the expenses to the card, which is when your business was still active.

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