1) If I elect S-Corp now, aren't there large fines to pay - like $195 per month since April, so almost $1400? For my 2014 personal tax return, I only had a total tax liability of $59 on income of about $22,000, so I wouldn't be getting any S-corp pass-through benefit for the loss.
First of all - you may not simply file as S-corporation - there must be a special election for your corporation to be treated as S-corporation.
If you want S-corporation election to be in effect from December 2013 - that would be late election - and you would need specifically apply for the late election relief.
If you elect S-Corp NOW without late election - it will be effective from today of no more than 75 day before your application date.
But if you want election to be effective from Jan 1, 2014 - you do need the late election relief. Not to mention additional cost if you are using a tax preparation service.
If you file late S-corporation tax return - yes - there will be late filing penalties as you already know. You may apply to abate penalty if you have any reasonable cause.
For 2015, I'll be in the highest tax bracket via a marriage filing jointly, so then wouldn't I be able to carryforward the loss to 2015 and use it to offset income?
First of all - loss realized by C-corporation may NOT be passed to shareholders.
You may ONLY realize a capital loss which depends on your actual capital contributions into C-corporation - and which is realized ONLY if the corporation is dissolved. That will be capital loss - and it may be used only to offset other capital gains. But if you have net capital loss - up to $3000 may be used to offset other taxable income.
2) If I file the business taxes as a c-corp, the draft 1020 from my accountant shows $20,221 in "loans from shareholders" as I effectively funded the company during 2014 as it incurred monthly operating losses, although this was not pursuant to any sort of formal debt agreement. Would this amount qualify as "capital contributed to the corporation" that I could use as a capital loss in 2015?
There are two options - you may re-characterize the loan into capital contribution - and that amount will be added to your stock basis.
Or you may deduct the loan amount as a bad debt. Either will generate capital loss.