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