In what circumstances is it particularly desirable to consider electing S corporation status?
28.1 If you already have or plan to start a one-person or closely held business or professional activity, with probable losses during the first-year/second-year start-up period resulting from initial investments in equipment, doing-business materials or inventory, heavy operating expenses, low sales or other income, etc. The S election permits the pass-through of operating losses to shareholders who may have income to offset such losses. 28.2 If you already have a business with a high taxable income that distributes the majority of its earnings as dividends and that has low capital spending requirements. 28.3 The Federal Income Tax Law of 1993 increased the top individual (personal) tax rate from 31 to 36 percent on taxable income over $115,000 for single people and $140,000 for married couples filing jointly. Income in excess of $250,000 for singles or couples is subject to a 10 percent surcharge, raising their top rate to 39.6 percent. Since some exemptions and deductions may be elim
