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arkvalleyinfo
December 11, 2018
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Should I reimburse my S-Corp for personal expenses?

  • December 11, 2018
  • 2 replies
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My husband & I have used our company bank account for personal expenses a handful of times. I recently learned from our CPA that is illegal & not a good idea. Got it! Totally cool. 

Now- what do I do about the transactions we've already made? Should I label them owner's draws/distributions? 

Is it a good idea to reimburse the company out of our personal bank account in case we were to get audited in the future? 

Best answer by Rustler

When you use company funds for personal expenses, book them to an asset account you create called "due-from-[name]

then you pay back the company and deposit the payment using that same account as the source (from) account on the deposit

2 replies

Rustler
RustlerAnswer
December 11, 2018

When you use company funds for personal expenses, book them to an asset account you create called "due-from-[name]

then you pay back the company and deposit the payment using that same account as the source (from) account on the deposit

A
Anonymous
December 11, 2018

If you are an S corp, code the expenditures as Distributions and you should be fine. 

Rustler
Rustler
December 11, 2018
ahhh no
distributions are not equity drawing in a corp, distributions are occasional payments approved by the board and noted in the corp minutes.
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