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What is an S-Corporation?

 
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Category : > Article Directory To Open An S Corporation
Posted On : Thu Aug 27th,2009

 
An "S-Corporation" is a regular corporation that has between 1 and 100 shareholders and that passes-through net income or losses to shareholders. An S Corp is a corporation that elects to be treated as a pass-through entity (such as a sole proprietorship or partnership) for tax purposes.
 

An "S-Corporation" is a regular corporation that has between 1 and 100 shareholders and that passes-through net income or losses to shareholders. An S Corp is a corporation that elects to be treated as a pass-through entity (such as a sole proprietorship or partnership) for tax purposes. Since all corporate income is "passed through" directly to the shareholders who include the income on their individual tax returns, S Corporation are not subject to double taxation.

An eligible domestic corporation can avoid double taxation (once to the shareholders and again to the corporation) by electing to be treated as an S corporation. Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. On their tax returns, the S corporation's shareholders include their share of the corporation's separately stated items of income, deduction, loss, and credit, and their share of non-separately stated income or loss.   
 


  


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Comments (10)
InfoTaxSquare.com   wrote on : Sat Dec 05th,2009
S-Corporation is a pass through entity. Profit or loss pass through to your personal income tax return to calculate taxes. But to decide the structure of your business we strongly recommend to consult either your attorney or accountant.     View Detail
Gerard   wrote on : Sun Jan 03rd,2010
I am a share holder in an s corporation. The president of this corp. told me that I should give him all my fuel receipts, that it would give me more equity in the company. This doesn't sound correct to me, please help.     View Detail
Reply : infotaxsquare.com
 
Dear  Gerard,

First we thank you for choosing InfoTaxSquare.com for your business needs. As far as my knowledge is concerned It does not make sense. Fuel receipt can only allow you to claim legitimate expense for your business.

InfoTaxSquare.com
Documents Filing
Department!


Dragvon J   wrote on : Tue May 04th,2010
Need help becoming an LLC or to incorporate.     View Detail
Reply : infotaxsquare.com
 
S corporation's special tax status eliminates double taxation, it lacks the flexibility of an LLC in allocating income to the owners. An LLC may offer several classes of membership interests while an S corporation may only have one class of stock. An LLC is a pass-through tax entity. This means that the income to the entity is not taxed at the entity level. Whereas Corporations are treated as a separate legal taxable entity for income tax purposes. Therefore, corporations pay tax on their earnings

You may also read our article on this page for difference between Corporation and LLC.


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