S Corporation Benefits

Choosing a business structure is an important, and often confusing, decision for any small business owner. With the S Corporation election deadline approaching (March 15, 2016 for existing businesses), this is a good time to explore the advantages of electing S Corporation tax treatment to see if it’s right for your business.

Keep in mind that everything written here should be taken as general information and is not a substitute for advice from a tax advisor or CPA who’s familiar with the specifics of your situation.

What is an S Corporation?

An S Corporation refers to a special election that is made with the IRS that gives a business pass-through tax treatment for federal tax purposes. This means that when a business elects to be treated as an S Corporation, it does not pay federal taxes at the corporate level. Instead, any profits or loss of the business are passed through to the shareholders, who then report that profit/loss on their personal income tax returns.

The important


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Source: Small Business Trends