Series 22: 1.1.5. S Corporations

1.1.5.  S Corporations

An S corporation is a corporate structure created by Subchapter S of the tax code that allows its income and losses to be taxed as the personal income of its shareholders. Some corporations and all LLCs may elect to be taxed as an S corporation for the purpose of receiving certain tax benefits. For corporations that qualify, election to be taxed as an S corp avoids being taxed at both the corporate level and the shareholder level. For LLCs, S corp election avoids income and losses being taxed as self-employment income. It is important to note that an S corporation is a tax designation, not a business entity.

To become an S corporation