What is a Sub-chapter S Corporation?
This is a modification of a regular C corporation to permit taxes of the corporation to be treated in the same way as a sole proprietorship. It is a tax election. With this “Sub S” election, profits are not taxed at the corporation level. Instead, profits flow through to the owners (shareholders) who include them on their personal tax returns. Without this election, the corporation pays taxes on its profits. For more information on this topic, see your local SBDC.
