'Tis the season to make an S Corporation election.  If you have a corporation or LLC that was filed before January 1, 2010 and you have not already elected S corporation status, it may be something you want to consider.  In general, S Corporations do not pay any income taxes. Instead, the corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.

 

S corporation status provides many of the benefits of partnership taxation and at the same time gives the owners limited liability protection from creditors. S status combines the legal environment of C corporations with U.S. federal income taxation similar to that of partnerships.

To qualify for S Corp election, one must meet certain requirements: 

• have less than 100 shareholders;
• shareholders must be U.S. citizens or resident aliens;
• shareholders must be individuals, estates, certain exempt organizations, and certain types of trusts;
• have only one class of stock; and
• calendar year must end December 31st.  

 

If these requirements are met, the shareholders can file for S Corp election. Existing corporations must file by March 15th of the tax year to make the election. If this is a filing well-suited for your business, feel free to reach out to us.  We're happy to help!

 

Go to: S Corp Election for our great Rush S Corp election offer to get your S Corp documents filed in time!