What is an S Corporation?

An S Corporation is a pass-through entity which essentially means it does not pay taxes. Its members pay taxes once the profits or losses are distributed to them. As part of S Corporation setup, all owner employees will need to be paid reasonable salary according to the market/ industry rates.

The S tax classification needs to be applied with IRS  after you create LLC and Inc. 

If you elect to be taxed as an S Corporation, you are required to file form 2553.


Posted In: Company Formation

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