Deductions for S Corporation on Personal Tax Return

[Mig1980]

Good day. I am working to file my taxes using Turbo Tax Deluxe 2022. My wife and I opened a small business (mobile beverage truck) late last year.

I filed my business taxes as an S Corpration for myself and my other partners. We all received Schedule K-1 and I have entered the information on my personal tax return.

I am trying to figure out where to enter expenses for the business that my wife and I had from the business? Would they go under Schedule C or somewhere else?

[Mike9241]

it is not clear whether the S-corp is the same as beverage truck business. please clarify this.

also, what was the nature of the expenses you and your spouse incurred?

[Mig1980]

Yes, the beverage truck business is an S Corp. We are looking to deduct home office expenses for managing the business and vehicle expenses (are cars used to manage the business)

[Critter-3 · Accepted solution]

Sorry, but unlike a partnership, the home office expenses are not deductible on the personal return. If the corp doesn't own the home you can "rent" space to the company  and the rent would be a deduction on the corp return but the income would have to be reported on the Sch E or Sch C on the personal return along with the correlating expenses.   Hopefully you and anyone else working the business are on the payroll and filing proper payroll tax reports and issuing yourself W-2 forms.  From 2018 thru 2025 an employee cannot deduct employee business expenses on a personal tax return Sch A. 

[Mig1980]

Thank you for that information. What about vehicle expenses for my personal vehicles that are being used for business use as well for the S Corp?

[tagteam]

With respect to the vehicles you own, the answer is primarily the same as the answer @Critter-3 posted with regard to your home office; the corporation can reimburse you for your expenses and deduct those expenses on its 1120-S.

[Mig1980]

Just to be clear, vehicle deductions can only be reimbursed from the S Corp? I can't claim those expenses as deductions on my personal taxes since S Corp passes tax liabilities to the partners?

[tagteam]

Yes, because you are an employee of the S corporation if you perform services for the corporation.

S corporations have shareholders (many of whom are also employees), not partners as do partnerships or multi-member LLCs (which default to partnership status for federal income tax purposes).

[Critter-3]

You need to get some education on this matter ... please read up on the Accountable/Nonacountable plans here :  https://www.irs.gov/pub/irs-pdf/p463.pdf