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S Corporation Election

An S corporation is an attractive option for small business owners. One of its reasons is that its tax benefits are more appealing than the C corporations. It also provides owners liability protection of a corporation. Deciding to be an S corporation allows you to pass the company’s income and losses through to shareholders. For that reason, you will only have to deal with the federal tax.

However, your cooperation has to be eligible for an S corporation election. Some of the requirements to qualify for S corporation status include:

  • Must be a domestic corporation.
  • The shareholders must not be more than 100 in number.
  • Shareholders must be individuals, certain trusts and estates and cannot be partnerships, other corporations or non-resident alien shareholders.
  • Cannot have more than 100 shareholders.
  • Must only have one class of stock.
When Should It be Filed?

Filing of S Corporation election should not be more than 60 days and 15 days after the start of the tax year that the election will take effect. In other words, it has to be the first year of the business. So, if your business started on the 7th of January, you must file the S Corporation election not later than March 15. Failure to submit means that you will not receive the S status for the said tax year.

How Much is the Fee of Filing an S Corporation Election?

You do not have to pay anything when you file an S Corporation Election. Even though there is no fee to pay to the IRS, you should consider retaining an attorney who will do the paperwork. In this way, you can be sure that all of the necessary documents are properly filed.

Business Structure

Some business owners have trouble in making a choice between the LLCs and S corporations. The reason for this is that both of them possess similarities, but they also have some differences. As previously mentioned, an S corporation cannot have more than 100 members or shareholders. The LLC, on the other hand, can have unlimited owners. An LLC can have foreign investors and LLCs are also more flexible in sharing profits than the S corporation.

Are you Ready to Form an S Corporation?

Should you decide for an S corporation, you may contact our attorneys at Enterprise Consultants Group. Our tax professionals have been in business for decades. Contact us today for an initial consultation. If you have further questions about S corporation election, please do not hesitate to call our tax lawyers at (800) 575-9284.

Client Reviews
★★★★★
For some unknown reason, I neglected to file my income taxes for several years. With that, I ended up getting notices from the IRS. I had no knowledge on how to deal with the IRS, so I contacted Enterprise Consultants Group as recommended by a colleague of mine. The firm’s tax attorneys helped me get a good deal. My funds are back. Thanks, Enterprise Consultants Group. Edward Nigel
★★★★★
Before we started working with Enterprise Consultants Group, our company owed $100,000 in past taxes. But the tax attorneys at the Enterprise Consultants Group dealt with the IRS on our behalf. Because of that, we settled our debt for $10,000. The total cost we paid to our tax attorneys was less than the original due. Thank you Enterprise Consultants Group for alleviating our heavy burden Mary
★★★★★
Enterprise Consultants Group has outstanding attorneys. They kept me informed promptly. They we’re not in a hurry to settle our case just to get their fees. They did what they could to get me the best settlement I deserved. I would recommend them to any person who needs help with his tax problems. Sheila
★★★★★
My business received letters from the IRS indicating that they had opened and audit. In know I needed help but I was reluctant. I Google searched and found Enterprise Consultants Group, then called for a free consultation. I was impressed with professionalism knowledge of the consultant that I spoke to so I hired them for my business. During the audit period they were always available to answer my questions. I feel that they handled things efficiently and I'm very happy with the end result. C. Bell
★★★★★
After my divorce I was left with a heavy tax debt of over $250,000. To make matters worse I was broke and feared that my wages were going to get garnished. I called Enterprise Consultants Group after seeing a TV ad and they quickly got work with resolving my issue. They settled my tax debt for $3500. I quickly borrowed that amount from family and paid it off. Now that I'm tax debt free, my stress level has come down and I'm doing much better with my finances. B. Davis
★★★★★
The Advocates at ECG helped me clean up a huge mess that another tax firm created. They honestly exceeded my expectations. Now ECG continues to file my taxes every year. I am thankful to have found a firm that I can trust with my taxes. J. Flowers