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January 10, 2022
Question

Can I pay my s Corp tax using my personal account?

  • January 10, 2022
  • 1 reply
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Am I able to pay my s Corp taxes using my personal account? I don’t have enough funds in my business account and am dissolving my business. I am not sure if I am allowed to pay the s Corp taxes using my personal funds / credit card. 

1 reply

DanielV01
January 10, 2022

Yes you may.  An S Corp does not typically pay Federal taxes, since the income is passed through to you personally and taxed at the state level.  So I believe that you are likely speaking about state or local taxes, which may be "occupational license" tax or something similar.  Regardless, there's nothing that precludes you from paying from a personal account.  

 

At the same time, if you dissolve the business effective 12/31/21, you will lose the ability to deduct the taxes.  It is better to dissolve the business after having paid the taxes.  Not enough funds in the business account?  Not an issue.  You can count the payment from your personal funds as a contribution to basis, so that the expense reduces it the same amount.  This allows you to claim loss at the end of the year if you need to.  Remember that you will also need to distribute all of your remaining funds in your S-Corp to bring your account down to zero.

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