Loaning money to S-Corp, how to account for it? EZ or Complicated!?

[magnetic430]

100k sales means no Schedule L required.

Also not charging interest.

I always figured if I loan my S-Corp $1,000 and then just pay it back from sales it's all good and has no effect on taxes (maybe I'm wrong?). 

However, I sadly loaned the biz money (under $5k) by swiping a personal credit card on the business POS machine. That means it appears on a 1099k.

Google implies to put an expense called Loans. I'm thinking maybe that's only if doing Schedule L? 

I'm probably over complicating things, but I worry things should definitely matter HOW the money was used as well. How could it be the same if I loan the biz $1k and it used the money for COGS verses used it just to make a business credit card payment. (COGS = would be reported as a COGS expense was made, but a credit card payment isn't reported as it was the previous transactions that were the expenses).

UPDATED THINKING: If I loan the biz $100 cash and it pays a business credit card, the business can just give me the $100 back and it absolutely does not effect taxes at all. Pretty sure that's correct.

Still completely stuck on how to account for loaning money through a credit card machine where it hit a 1099K and thinking there's a difference between how the business used the money. Writing a loan as an expense PLUS adding an expense for money used for inventory/supplies seems off. (And then having it be just as a loan expense if I used the funds to pay a credit card payment where that isn't reported). Thanks for ANY ideas!

[MaxA1]

If your overall income is greater than your 1099K then you don't need to worry about the loan you issued yourself via the POS system.  The loan is a balance sheet item and is offset once it is paid back.  There's no income or tax effect on loans.  The only tax implications for a loan could be related to interest income/expense, which you mentioned you aren't charging any interest income.

Additionally, since you aren't required to report your balance sheet on Sch L, the loan amount will not be reported to the IRS which will stay "under the radar".  Note, that in order for a shareholder loan to be "legit" in the IRS' eyes, it needs to be an interest-bearing loan.

[magnetic430]

Thanks for replying, I truly appreciate it! I'll reread it in the morning as I found it helpful, but I'm not 100% sure it clarifies the current issue?

I loaned $5k to the business that shows up on a 1099k because it was through a personal credit card.

Wouldn't that mean it appears as a $5k sale that comes to my personal return (from the K1 issued) as a $5k profit if I do nothing? I'm not sure why the overall income being higher than the 1099k matters. :(

I think I'm supposed to at least classify the $5k it paid back as some kind of expense, as then it washes out the 1099k sale. 

That all sounds great, and maybe I'm just overcomplicating things due to anxiety(!), but it doesn't seem that simple because the $5k loaned could have been a "non tax return event" of paying off business credit cards, or it could have been a "tax event" like if I bought $5k in shipping postage with it.. now I have a $5k postage expense on my return as well. (My brain hurts, maybe that doesn't matter but seems like it would make a difference).

[upscale22]

"There's no income or tax effect on loans." I see how that's true if I loan cash that's paid back, but when it comes to the loan being by using a personal credit card that makes it on a 1099K that seems like there is a tax effect as it's now being reported as income/profit.

Isn't this what's happening: 

Business makes $100 profit selling on eBay. Business uses that money to pay shipping expenses. Tax wise it's $0 profit.

Business "makes" $100 from loan through credit card that shows up on 1099k. Business uses that money to pay shipping expenses. Tax wise it's $0 profit. HOWEVER, now business has to make another $100 to pay me back, so at the end tax wise it's $100 profit all because of that 1099K. 

[ThomasM125]

If you report the income on the Form 1099-K as your business income, then you would need to deduct the money you contributed. You can do that by including it in Returns and Allowances or by setting up a miscellaneous expense account for it.