What is the difference between as S and a C or regular corporation?
An S corporation is the incorporation of an ordinary business formed and operated under a state’s general corporation law, but the corporation has applied to and been approved by the Internal Revenue Service to be taxed as an S corporation. An S corporation is generally treated like a partnership for federal income tax purposes. It files an “information” tax return to report its income and expenses, and is not separately taxed as a C corporation. Income and expenses of an S corporation “flow through” to the shareholders in proportion to their share holdings, and profits are taxed to the shareholders at their individual tax rates. If an S corporation has shareholders that are not Utah residents, then the nonresident portion of the corporate income is subject to a withholding tax for the non-resident shareholders.
An S corporation is the incorporation of an ordinary business formed and operated under a state’s general corporation law, but the corporation has applied to and been approved by the Internal Revenue Service to be taxed as an S corporation. An S corporation is generally treated like a partnership for federal income tax purposes. It files an “information” tax return to report its income and expenses, and is not separately taxed as a C corporation. Income and expenses of an S corporation “flow through” to the shareholders in proportion to their share holdings, and profits are taxed to the shareholders at their individual tax rates. If an S corporation has shareholders that are not Utah residents, then the nonresident portion of the corporate income is subject to tax in a composite filing.
