timwheeler Posted April 17, 2012 Report Share Posted April 17, 2012 I just realized I made a mistake. I earned a bunch of $ in my s corp last year. I just made cash distributions to myself and did not do payroll. I made a max simple IRA and traditional IRA contribution. Then when doing my taxes I noticed that the IRA contributions are not deductable because I did not pay myself any wages. Is there any way to make these contributions deductable? Any yes, in the future most or all money I distribute from the s-corp will be as wages. I am trying to be legit here. Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted April 17, 2012 Report Share Posted April 17, 2012 The best thing you can do is to contact a tax professional in your area. 1 Quote Link to comment Share on other sites More sharing options...
jainen Posted April 27, 2012 Report Share Posted April 27, 2012 >>the IRA contributions are not deductable because I did not pay myself any wages<< Worse than non deductible. The excess contribution is subject to a 6% excise tax every year until withdrawn. Any earnings have to be withdrawn too, and they are subject to a 10% excise tax in addition to your highest tax bracket. If you were audited the IRS might recharacterize your S-corp earnings as wages, so why not do that yourself first? Like MAS says, contact a tax professional in your area. 1 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted April 27, 2012 Report Share Posted April 27, 2012 "Do it yourself" tax software does not have the knowledge to properly prepare your tax return. Seek out a professional. You are in over your head. Quote Link to comment Share on other sites More sharing options...
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