An S corporation, also known as an S-corp, is a pass-through entity. Corporations set up this way share the income, deductions, profits and losses of a corporation with it's owners. Shareholders are able to file their S- corp taxes at personal income tax rates as they pay taxes on their share of the S-corp's income. This allows S- corps to avoid double taxation on the corporate income.
Typically an S corporation has employees, in this case the company is responsible for withholding federal income tax, Social Security and Medicare taxes from their paychecks requiring an S corporation to file an IRS Form 941 each quarter to reports total witholdings.
The standard forms included with S-Corp filing are 1120S and Schedule K-1. If an S-corp has employees, a Form 940, Form 941 or Form 1099 may also be required. S-corps will also need to issue a W-2 to employees and Form 1099-MISC to independent contractors.
To qualify for S corporation tax filing you must:
- Be a domestic corporation
- Have only allowable shareholder
- May be individuals, certain trusts, and estates
- May 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).
Planning is the key to successfully and legally reducing your corporation's tax liability. We go beyond tax compliance and proactively recommend tax saving strategies to maximize your after-tax income.
Contact Paramount Tax & Accounting - Lehi if you'd like to receive more information about our Lehi S Corp Tax Prep Services.
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Many people do not know how a professional tax and accounting firm differs from a bookkeeper or tax preparer. The main difference when working with a professional tax and accounting firm, such as Paramount Tax & Accounting - Lehi, is that our firm utilizes the services of CPAs, EAs, and Attorneys who are distinguished from other finance professionals by stringent qualification and licensing requirements. Paramount has worked hard to create relationships to deliver the value that our clients expect. In fact, our goal is to be the No. 1 S Corp Tax firm in Utah. So when you ask yourself, "Where can I find S Corp Tax services near me?"... think no further than Paramount Tax & Accounting - Lehi!
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