“Can I pay my cell phone bill through my business checking account?”-->I guess basically, it depends on the situation; if your S corp cash flow accepts, then you may reimburse expenses each period as needed. It is possible that your business checking account credit card could be obtained and used to pay those business expenses. If cash flow of the S corp is not sufficient, then you MAY record your personal funds use as a loan.
“Can I pay the car that is currently in my name?”-->As long as your S corp or you own the car, and you(or S corp) uses it for business trips and meeting with clients( 60% business use) , then you or S corp can claim auto expense such as gas, repairs & maintenance OR mileage exp. 60% of auto expenses are deductible; the expenses can be deducted on the 1120S as shareholder distribution. Iguess tolls and parking can be in addition to actual expense or mileage.However,you can take depreciation and other actual expenses , but you s can deduct 60%. The deduction is based upon the personal vs. business use. The only way you MAY deduct 100% is to include the personal use in the employee/shareholder's compensation.
“Do I need to pay myself from the corporation to pay the bills I would like to Pay?--> You need to pay yourself a reasonable salary and distributing the rest through dividends (so it is exempt from SE taxesUNLESS youyare actively engagned in management)You neeed to determine what reasonable salary is for you. Some factors considered by the IRS and courts to determine if shareholder-employee compensation is reasonable is; Compensation paid for similar positions in other companies;time spent performing services for the corporation;compensation paid by the corporation to the officer in prior years if there is;the shareholders background and experience, or etc.
“Generally, what is the best way to pay some of the bills for items that I do use for my business such as phone and driving etc..”---> I guess it depends on each financial situation. Your S corp and you, as separate entities, the corporation would probably prefer to carry reimbursements as accounts payable items and pay them out as cash flow permits, just like any other vendor. If repayment will come over a longer period of time, you as the creditor might prefer to convert some of the open account financing to an interest bearing loan. |