S Corporations are corporations that elect to pass corporate income, losses, deductions, and credit through their shareholders for federal tax purposes.
Taxation of S Corporations is similar to that of a partnership in that the income, deductions, and tax credits flow through to shareholders annually. As a result of this, income is taxed at the shareholder level and not at the corporate level.
Forming S Corporation
Before you elect to be an S Corporation, you must first file as a corporation.
Once you file as a corporation, all shareholders will have to sign and file Form 2553 to make the election of being an S Corporation.
In forming a corporation, it is best that you seek advice from an attorney to understand whether the route you are taking is the correct one for you. Our firm can help you make the right decisions to best protect you as you start a new business.