S Corporation

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S Corporation

A corporation that elects not to be taxed as a corporation. That is, the corporation does not directly pay federal income tax on its earnings. Similar to a partnership, it passes its income or losses and other tax items on to its shareholders.

S Corporation

A business with few shareholders that is exempt from some taxes levied on other corporations. Specifically, an S corporation is not responsible for taxes on its profits (corporate taxes) and is taxed as if it were a partnership. However, it may have no more than 100 shareholders. An S corporate structure allows a company to take advantage of some of the benefits of incorporation without all of the responsibilities attached to it.
References in periodicals archive ?
These variables are available for C-corporations, S-corporations, and partnerships, but not for sole proprietorships.
Many small businesses, including construction and architecture firms, elect S-corporation tax status.
Another significant change is a qualified business income deduction for "flow-through entities," such as S-corporations, partnerships as well as sole proprietorships whose profits are passed on to the business owners.
According to the IRS, the Trump tax law allows owners of eligible sole proprietorships, partnerships, trusts and S-corporations to deduct 20 percent of their qualified business income.
* A new 20 percent pass-through deduction, though complicated, is available for qualified business income in sole proprietorships, partnerships and S-corporations.
The tax shall be calculated at the highest rate of tax attributable to individuals for individuals, S-Corporations, trusts, estates, disregarded entities not owned by C-Corporations, and partnerships; the highest rate of tax attributable to corporations for C-corporations and entities owned by C-corporations; and a zero rate of tax for tax-exempt or nontaxable partners.
The break lowers rates for some owners of "pass through" businesses - such as S-corporations, LLCs and partnerships - on income of less than $5 million, but it doesn't have set any requirements that the firms have or create jobs.
Transactions between S-corporations Treasury has determined that the income tax consequences of mischaracterizing equity instruments as debt in these circumstances are limited.
Before discussing the differences between LLCs and S-Corporations, it is important to understand their similarities.
His areas of expertise include Corporations, S-Corporations, Limited Liability Companies, Partnership, Individual, Trusts and Estates taxation.
Some businesses, like S-corporations, sole proprietorships, or partnerships, file their taxes through the individual tax code.
Directors of corporations (be they C- or S-corporations) are supposed to maximize shareholder value.