Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

I started my S corp and funded with X dollar amount with…

I started my S corp...
I started my S corp and funded with X dollar amount with agreement to pay back loan plus interest on monthly basis. my tax question is can I deduct monthly payment as expense?
Show More
Show Less
Ask Your Own Tax Question
Answered in 2 minutes by:
3/14/2018
Brian Michels
Brian Michels, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 199
Experience: Partner at Michels & Hanley CPAs, LLP
Verified

Hello. My name is ***** ***** I'll be the Expert assisting you today. I am a licensed CPA. I look forward to helping you with your issue today. The interest associated with the loan is treated as a business deduction however the interest income you receive personally is interest income. A Form 1099 must be issued from the business to you personally at the end of the year indicating the total interest paid to you.

I hope I’ve provided the information you were seeking. If you are happy with my service, your 5-star rating at this time is most welcome. If you need more help, please let me know so l can continue to assist you.

Brian Michels
Brian Michels, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 199
Experience: Partner at Michels & Hanley CPAs, LLP
Verified
Brian Michels and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 1 month ago
Ok thanks for the interest part. Is monthly payment toward capital of loan also treated as a business deduction?

No. The monthly principal payment is a reduction in the loan balance. If you gave a loan to the corporation you would debit cash and credit loan payable. When you make payments you will credit cash and debit the loan balance for the principal portion and debit interest expense for the interest portion.

Ask Your Own Tax Question
Customer reply replied 1 month ago
awesome, so The monthly principal payment is a reduction in the loan balance. but it should NOT be the income on Schedule K-1, correct?

Correct. Its a debt repayment and not income or expense to business or shareholder. only the interest expense is included as a business deduction (and income to the recipient).

Ask Your Own Tax Question
Was this answer helpful?
Ask Brian Michels Your Own Question
Brian Michels
Brian Michels
Brian Michels, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 199
199 Satisfied Customers
Experience: Partner at Michels & Hanley CPAs, LLP

Brian Michels is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,451 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

56 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,124 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
A quick? Received a notice of credit for income tax
Good afternoon. A quick ? Received a notice of credit for income tax purposes. Notice says if we declared amt of disability as income on prior years taxes. And we did. We now can show that as an. Offs… read more
Dr. Arthur Rubin
Dr. Arthur Rubin
Doctoral Degree
172 satisfied customers
Schedule K-1, Form 1041. Sorry. On Schedule K-1, Form 1041.
Sorry. On Schedule K-1, Form 1041. Line 14 Other Information: H, the amount is in parenthesis, does this mean it is a negative $amount. … read more
Carter McBride
Carter McBride
LLM
957 satisfied customers
I am trying to enter information from a schedule K-1 form
I am trying to enter information from a schedule K-1 form into turbotax it is asking me to enter code P detail. On my information sheet for box 12, code P the wording is different from what turbo tax … read more
Mike-USACPA
Mike-USACPA
President
63 satisfied customers
I received a Schedule K-1 Form 1041 for 2017. Do I need to
I received a Schedule K-1 Form 1041 for 2017. Do I need to file this with my 2017 tax return? … read more
Tax.appeal.168
Tax.appeal.168
Principal
13 satisfied customers
I received a schedule K-1 form 1041. My father passed away
I received a schedule K-1 form 1041. My father passed away and had a trust. It is indicated on the form that there were net long term capital gains of $6600. I believe that I have to pay taxes on that… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,043 satisfied customers
Taxes: Where could I claim interest charges from Credit
Taxes: Where could I claim interest charges from Credit Cards and Fees from Banks and the fee that I pay to be able to pay the rent thru the Internet. Thank you . I am doing a Married filling jointly … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
916 satisfied customers
HOw do you enter information over from schedule K-1 100S
HOw do you enter information over from schedule K-1 100S California schedule to the California state return? there are 5 columns A - pro rata share items, B - Amount from federal Schedule k-1 (Form 11… read more
Dr. Arthur Rubin
Dr. Arthur Rubin
Doctoral Degree
172 satisfied customers
I received a schedule k-1 (form 1065) this year as an
i received a schedule k-1 (form 1065) this year as an individual partner and a '2017 supplemental information' sheet. do i just submit this info with my tax return. do i need to include any of the inf… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,043 satisfied customers
I received a Schedule K-1 for a investment that is held
I received a Schedule K-1 for a investment that is held within my IRA Account. I was informed by the issuing LP that I need to file a form that replaces the need to put the information from the K-1 on… read more
Cole Parker
Cole Parker
Principal/CPA
Bachelor\u0027s Degree
83 satisfied customers
Can I take mortgage interest and the standard deductions?
Can I take mortgage interest and the standard deductions? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,124 satisfied customers
A question regarding interest deduction for time share
HI THERE. A question regarding interest deduction for time share payments. My wife and I have 2 time shares.. Blue Green .and Diamond Resorts. Both annually mail us interest paid reports for taxes. Th… read more
Carter McBride
Carter McBride
LLM
957 satisfied customers
I have a schedule K-1 from Blackstone Group LP. For box 16A
I have a schedule K-1 from Blackstone Group LP. For box 16A it says VARIOUS. Then later in asks to divide U.S. Source from Foreign Income on the Enter Income Detail Screen. I have no idea what to put … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a question regarding a Schedule K-1 that i received.
hello, i have a question regarding a Schedule K-1 that i received … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,124 satisfied customers
On Form 1065, which places do you report interest income.
For Partnership on Form 1065, which places do you report interest income. Such interest earned on a bank account balance by the Partnership.It seems like it needs be put on "Line 7. Other Income (Loss… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,906 satisfied customers
I have a question about interest income and interest
I have a question about interest income and interest expenses. We owned a small business which we sold in 2016. We provided the financing for the buyer. He continues to make monthly payments which inc… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
45 satisfied customers
This is a follow-up question. a schedule K-1 for the 1/3
this is a follow-up question. a schedule K-1 for the 1/3 which is reported on the form 8949. Do I give the 2/3 owners a form 1009-s for their respective shares of the sale?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Can a parent deduct Form 1098-E Student loan interest paid
Hi. Can a parent deduct Form 1098-E Student loan interest paid on their tax return instead of the students return. Student qualifies as the parents dependent. … read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
125 satisfied customers
I received a Schedule K-1 (Form 1041) from my aunt's estate
I received a Schedule K-1 (Form 1041) from my aunt's estate from which I received a distribution. In Part 3, Beneficiary's Share of Current Year Income, Deductions, Credits, and Other Items, there is … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,043 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x