S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income at the entity level.
To qualify for S corporation status, the corporation must meet the following requirements:
– Be a domestic corporation
– Have only allowable shareholders
. May be individuals, certain trusts, and estates and
. May not be partnerships, corporations or non-resident alien shareholders
– Have no more than 100 shareholders
– Have only one class of stock
– Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations).
In order to become an S corporation, the corporation must submit Form 2553 Election by a Small Business Corporation (PDF) signed by all the shareholders. See the Instructions for Form 2553 (PDF) for all required information and to determine where to file the form.
Filing Requirements:
S Corporation
If you are an S corporation then you may be liable for:
– Income Tax
– Estimated tax
– Employment taxes:
– Social security and Medicare taxes and income tax withholding
- Federal unemployment (FUTA) tax
- Depositing employment taxes
– Excise Taxes
S Corporation Shareholders
If you are an S corporation shareholder then you may be liable for:
– Income Tax
– Estimated tax
For more detailed information please do not hesitate to call us @ (310) 820-1080 or email @ info@onts9.com