Here’s a common scenario: You’ve decided to dissolve your corporation, and then you suddenly realize that you’ve got some additional expenses for that corporation. Since the corporation doesn’t exist anymore, you pay them yourself. Is this a tax-deductible expense for you?
In fact, it isn’t. Since you didn’t incur the expenses through a corporation that currently exists, you cannot pay the expenses and then claim them as a personal deduction. As you can imagine, this isn’t an ideal situation.
That’s why, if you’re planning to dissolve your S corporation, you should be sure to plan for any expenses you may incur. Don’t dissolve your corporation until you have ensured that all bills and other expenses are paid up, and that all of your accounts payable have been resolved.
However, this could lead to another problem: Keeping your corporation open comes with its own expenses, which you may not be able to afford. In these situations, it’s best to carefully weigh the respective benefits of keeping your corporation open for an additional period of time versus closing it immediately.