My Tax Strategy

COREMEGA2002 profile photo

Let's say I have two corporations an LLC (treated as a s corp) and an S corp. I want to use the income from my job to raise capital for my S corp so i invest $30,000 over the course of the year into my S Corp. That's aproximatly $2500 a month. I use my S corp to purchase business services (EX web design, hosting, accounting etc..) from my LLC at $2500 a month for the course of the year. So all my invesment in my S corp goes to my LLC. Then I use ALL of the profit from my LLC to purchase business equipment ex: Fax, Computers services and supplies.

Since for both of my businesses these services and items are tax deductible, will I receive a check from the government for 30,000 for my LLC and another check for 30,000 for my S corp.

Please give me some sort of way that this could work. If not how can I make it work.

Please give my the best course of action. I'm just being creative.

Comments(1)

  • rgolowin29th February, 2004

    Being extremely general, you can't get a tax refund larger than your income. Here you are getting $60k back when you only mention $30k of income.

    Further, "deductible" does not mean you get all the money back ($30,000), in the end you would only get a percentage (even if such action was permissible), subject to many rules.

    Your example is not really specific enough to pose a real response, but I think you have some misconceptions about how taxes work in this type of setup. However, it is always good to be creative and think things through. Keep it up.

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