" I started an S-Corp in November and made a lot of business purchases from my personal account, before the business account was setup. Due to low initial profitability, I wasn't able to reimburse myself until the following year. I understand Accountable Plan Reimbursals, but since the reimbursement funds didn't actually leave the S-Corp until the next tax year, on which 1120S would I actually make the expense claim - the first short year, or the following profitable year?
The itemized receipts are all for the prior year, however, the actual "loss" to the S-Corp doesn't technically happen until the subsequent year. Just trying to stay legal and above suspicion. Thanks."
the S-corp gets the eduction in the year it reimburses you.
depending on what you bought, some "expenses" may need to be capitalized. when did the S_corp open for business - attempt to acquire clients/customers by advertising or doing other things that would allow some one to buy the S-Corp goods or services. expenses incurred before then would be start-up expenses subject to IRC code section 195. https://www.law.cornell.edu/uscode/text/26/195
certain expenditures may need to be capitalized.
also, the IRS likes to see S-Corp officers/employees - (ie you) take a salary. there are many other things taxwise and other with a new business - sales tax returns, payroll tax returns, workmen's comp insurance, other insurance, etc. . it's advisable for you to consult with a pro to advise you of your responsibilities.
What you "technically " did is you gave the company a LOAN (loan from shareholder) in order to pay for these expenses so you can deduct them on the company return in the year they are purchased. In future years, as the company is able, it will repay these loan amounts ( repayment of loan from shareholder) and technically the company should pay you some interest on the loan.
The loan from shareholder is NOT income and repayment is NOT an expense/deduction to the company. These are bookkeeping concepts that you need to educate yourself on or employ a bookkeeper to keep the books correctly. This infusion of funds will adjust your basis in the business which also must be kept track of per the IRS regulations.