Author Topic: Cashflow is up and S-corp now has increased tax problem, any ideas to fix this?  (Read 304 times)


  • 5 O'Clock Shadow
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  • Posts: 2
For years we had large amount of credit card dept and we were able to deduct the interest so our tax base was always very low, plus we have rental properties with all its deductions. Now we paid 95% of the CC dept of and our tax return is showing all kinds of cash-flow. It is a real estate investment business via an S Corp business entity.
Any ideas on how to make sure we don't have to pay 10s of thousands of $$$. We have two boys about to go to college and we did never set up a SEP 401K or any other private fund (aside from wife's TSP and our RE holdings)
« Last Edit: October 06, 2017, 05:46:17 PM by AnnapolisMustachian »


  • Pencil Stache
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  • Posts: 809
  • Age: 57
  • Location: Redmond, WA
    • Evergreen Small Business
An S corporation won't increase your tax problem. It should, if anything, be helping (as long as you have an active trade or business)...

BTW, I say this hoping you haven't actually put real estate inside an S corporation. That's a mistake. It doesn't cause an immediate tax problem... but eventually it will.
My blog Evergreen Small Business
My free downloadable ebook: Thirteen Word Retirement Plan


  • 5 O'Clock Shadow
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  • Posts: 2
SeattleCPA, Thanks for your response!
 I am active RE investor (buy and hold) and the wife is a gov employee,  the issue is not with the legal status of the RE holdings, the issue/question we have is about tax strategies for 2017 return as it looks like we are loosing a bunch of our CC interest expenses on our 2016 deductions, we used to get these deductions on our personal returns for years. We are running out of deductible expenses so i am seeking ideas for new ones.

         open:  college savings account for kids
                     or SEP 401K
                     or new co car purchase
any ideas are appreciated.