S-Corporations
Subchapter S corporations (commonly called S-Corps) are becoming increasingly popular among business owners. S-corps are corporations that elect to pass corporate income, losses, deductions and credits to their shareholders for federal tax purposes. Most states, like Pennsylvania, also accept the S-corp status. Shareholders of S-corporations report their share of income and losses directly on their personal; tax returns where it is assessed at their individual tax rates. This allows shareholders to avoid double taxation on the corporate income.
To qualify for S corporation status, the corporation must meet the following requirements:*
- Be a domestic corporation
- Have only allowable shareholders
- May be individuals, certain trusts, and estates and
- Man not be partnerships, corporations or non-resident alien shareholders
- Have no more than 100 shareholders
- Have only one class of stock
- Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations).
* Source: IRS.gov
Manada Tax Service will review your specific business needs to determine whether an S-corp election will benefit your shareholders. We will help you file the appropriate paperwork, setup payroll, and design an easy to use recordkeeping system.
Each year Manada Tax Service will complete your S-corp tax return and provide Form K1s to all the shareholders. If desired, we can also complete each partners’ personal income tax return and calculate estimated quarterly tax filings.