Help with s-corp

[timwheeler]

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.

[ILLMAS]

The best thing you can do is to contact a tax professional in your area.

[jainen]

>>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 The excess contribution is subject to a 6% excise tax every year until withdrawn. Any earnings have to be withdrawn too, and they are subject to a 10% excise tax in addition to your highest tax bracket.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.

[Jack from Ohio]

"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.