To have a full grasp of the tax advantages of an S Corp and C Corp, you have to clearly define S Corp and C Corp. What is an S Corporation? An S Corporation which is referred to as Small Business Corporation is a business elected for S Corporation Status through the IRS. This business…
The deadline to elect S Corporation tax treatment for your LLC will depend on whether your LLC is new or is in its second (or later) tax year. For a new LLC, you will have to file an S-Corp election within two months and 15 days (75 days total) of the date of formation for…
First and foremost, you can’t check S Corp status online; rather, you will have to contact the IRS directly to know the status of your S Corp. If you have properly filed and sent in your S corporation form to the IRS and have not heard back, you will have to reach the IRS via…
The default federal tax status for a single member limited liability company (SMLLC) is a disregarded entity. However, the owner of an SMLLC can elect to have the business taxed as either a traditional C corporation or as an S corporation. An S corporation is a special type of small, closely-held corporation. An S corporation,…
No. A sole proprietorship can’t elect or change to an S Corp directly. Instead, the owner will first have to form either an LLC or a C Corp before electing S Corp status with the Internal Revenue Service (IRS). To be taxed as an S Corp, a sole proprietor would need to
Choosing the right entity requires well-detailed research on how the guidelines and restrictions will impact your business taxes, management structure, and ability to form subsidiaries and issue stock. While there are numerous options available, a good number of businesses are beginning to adopt the S Corp status. However, note that an S corporation isn’t a…
A good number of modern businesses prefer to operate as S corporations to avert the complication of C corporations and to avoid double taxation. C corporations are taxed before the money is shared with their shareholders who are taxed yet again; however, the income of S Corporations tends to flow directly to shareholders who are…
Form 1120S is the tax form S corporations use to file their federal income tax return (not to be confused with Form 1120 for C corporations). Every S corp. needs to file one, including LLCs that are taxed as S corps. S corps use this tax form to report any profits, losses, and deductions for…
This article will help you understand how to form an S Corporation in the United States of America. We will show you a step-by-step process of how to create an S Corporation in USA and all the documents and requirements needed. Without any further ado, let’s begin: What is an S Corporation? An S Corporation…
An S Corporation which is referred to as Small Business Corporation is a business elected for S Corporation Status through the IRS. This business status allows the taxation of the company to be similar to a partnership or sole proprietor as opposed to paying taxes based on a corporate tax structure. Please note that S…
Are you torn between the choice of registering a C Corp or S Corp? If YES, here are differences and similarities between C Corporation and S Corp. Firstly, it is important to state that under IRS rules, the C corporation is the standard (or default) corporation. The S corporation is a corporation that has elected…
Yes, S Corporation owners are eligible for unemployment insurance, however depending on some crucial factors. The IRS has officially stated that shareholders, who work for S corporations, even if the shareholder is the only owner or worker, are considered employees for purposes of the Federal Unemployment Tax Act. It simply means that a shareholder can…
Do you want to change your business entity from sole proprietor to S Corporation? If YES, here is 5-step guide on how to convert sole proprietorship to S Corp. For most new business owners, entrepreneurship is exciting, rewarding, and at times utterly confusing. From the very beginning, few people who wish to start a business…
Do you want to dissolve a corporation due to debt or other reasons? If YES, here is a complete guide on how to dissolve a corporation legally in 7 simple steps. All over the world, businesses wind down by simply closing down on operations. However, when a business is dissolved, then it means that it…