S Corporation – What Is It?
S Corporation – What Is It? For many small businesses, the “S” corporation is the business entity of choice. The “S” in S corporation refers to a tax designation. All corporations are created the same way under state law. A small business must then chose a tax status, to wit, “C”, “S” or non-profit. Important issues concerning S corporations are covered in this article. C Corporation v. S Corporation Federal tax laws automatically consider every corporation to be a “C” designation. A small business, however, may elect to be designated as an “S” corporation by filing IRS form 2553. The...