S Corporations
$10.97
Learn the essentials of S corporations, a popular business structure that offers tax advantages by passing income, losses, deductions, and credits directly to shareholders. This guide covers the qualifications for S corporation status, the process of electing this status, and the responsibilities of S corporation shareholders. It also outlines the tax obligations and advantages of S corporations, making it an ideal resource for small business owners and those considering this corporate structure.
Highlights:
• Pass-Through Taxation: S Corporations allow income, losses, deductions, and credits to pass through to shareholders, avoiding double taxation.
• Shareholder Requirements: Must have only allowable shareholders, such as individuals, certain trusts, and estates, with no more than 100 shareholders.
• Corporate Formalities: Importance of maintaining corporate formalities to protect against personal liability.
• Reasonable Wages: Shareholders who provide services must be paid reasonable wages, subject to payroll taxes.
• Fringe Benefits: Restrictions on fringe benefits for shareholders owning more than 2% of the corporation.
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