B.S. in Accounting 14' Tax specialist
I'm looking to assist small businesses with data analytics and their associated business decisions.
I specialize in small business startup. Providing insight into what is doing well by analysing current data trends and assisting in decision-making.
You need to determine if your ownership qualifies under section 1244 - losses on small business stock.
These are some of the main qualifications 1. Stock must be in the hands of the originally issued. (You couldn't have bought it from someone) 2. Stock must have been issued for money or property. 3. Total capital contributions and paid-in surplus cannot exceed $1 Million.
Otherwise it will be classified as a capital loss and you will be limited to a $3000 deduction every year until exhausted.
Your question on the personal loan has a few undisclosed details that must be clarified for an accurate answer. Essentially you will have to qualify the "Loan" as a loan. Not only is a proper promissory note required, your corp will have had to make proper note payments with a market level interest rate. Otherwise, upon review of the IRS, they can classify the "Loan" as a capital contribution and disallow your deduction. This is a common mistake with individuals "Loaning" money to their businesses that deduct loan losses on their individual return only to have them disallowed due to lack of substantiation and proper procedure. If that is the case, it will end up as a capital loss and loss limited to the yearly $3000. That second "Contribution" that the IRS declares to be the case will not qualify under ยง1244.
If you're looking for deductions for your business and using a personal vehicle, keep track of mileage. Get a mileage app, Mile IQ comes to mind. (Don't ask me if it's any good, find one you like) Track personal miles and business miles, it comes in handy for the tax preparer. The 2018 rate is 54.5 cents a mile and it adds up quick. There are a few places where keeping all your receipts is advantageous when it comes to mileage, but that's unlikely. The 54.5 cents includes Fuel, Maintenance, and Depreciation. So any expenses associated with those three categories cannot be deducted when taking the standard mileage rate on the Sch C, F, or E. The standard mileage rate is almost always higher.
Do you volunteer? Keep track of those miles. 14 cents a mile. Going to the Doctor? Keep track of those miles. 18 cents a mile.
Now if you're working a job with a W-2 and your employer is not reimbursing you, you're SOL since 2% misc. deductions are now defunct. That doesn't sound like the case since you have a company card, but it was worth saying.
