How to report/record personal expense disbursement from C-Corp?

Forum|Forum|2 years ago
April 30, 2023
2 replies
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Does anyone know how I am supposed to record personal charges/expenses made from a C-Corp credit card or business checking account? If I want to record it on my personal join return in addition to the W2 I already have from that same c-corp. Can I just self report this amount on my personal return and where? Do I need to generate some kind of 1099 form from that c-corp before I add it to my personal income tax return?

Thank you

TurboTax Home & Biz Windows

rjs

Employee

You're not supposed to pay personal expenses with a company credit card or a company checking account.

All payments from an employer (the C corp) to an employee are supposed to be included in the wages on the employee's W-2.

It's not just a question of how to report it on your personal tax return. There's also a question of how to record it on the corporation's books and how to report it on the corporation's tax return.

I think you need a meeting with a local accountant to help you straighten out your accounting and payment practices.

Mike9241

most likely this would be a dividend reportable on 1099-div/1096 at year end. this assumes you take reasonable compensation for the year. if not then an argument could be made it's taxable wages. since there is no exact formula for dividends vs compensation you'll have to use your own discretion.

Critter-3

Agreed ... if this was not handled thru the payroll system then a dividend should have been issued to the owner (which FYI is not deductible on the C-Corp return) OR this could have been handled as a loan from shareholder and a repayment of the loan (with interest). You REALLY need to get educated on how a C-Corp works and follow the rules. If you are ever audited you will be pinned to the wall.