What Are the Benefits of An S Corporation?
An S corporation has declared a specific status with the IRS for tax purposes. S sorporations have all the benefits of a corporation but have additional advantages, specifically related to taxation. S sorporations are owned by up to 100 individual shareholders who each own a clearly defined percentage of the business. No Double Taxation Corporations typically pay taxes on their profits and the owners pay taxes on their portion of the profits (which are paid as dividends). This causes a situation of double taxation for the owners. By using an S corporation you can avoid double taxation on your company’s profit. S corporations do not pay taxes at all. Instead, they file an informational tax return using IRS Form 1120S (U.S. Income Tax Return for an S corporation) and provide Schedule K-1s for each shareholder. The Schedule K-1 allocates profits or losses to shareholders, who pay taxes on that profit on their individual returns. The amount passed through to each shareholder corresponds to
