S Corporation Tax Returns
The S corporation, or S Corp legal entity is one of the most popular business structure options in existence. The S corporation is a creation of federal tax regulations. For legal purposes the S corporations can be treated like a regular corporation, a partnership, or even an individual.
Some pitfalls to having a S corporation form of business:
- S corporations are treated as pass-through entities which can result in tax liabilities for the owners/shareholders. If not managed properly this can lead to a tax bill even though cash never flowed to the owners/shareholders
- In order to keep the legal liability protection that a S corporation structure offers, a business owner must operate the business under a specific set of rules
- Regulations restrict the number and types of people who can be shareholders in a S corporation
- S corporations can only have one class of stock.
But there can be some advantages to having an S corporation form of business:
- Unlike some other legal business structures S corporations are required to pay reasonable salaries related to owners/shareholders from corporate profits and deduct them for tax purposes
- S corporations avoid double taxation due to the pass-through treatment of its income
- Some earnings can be passed down to shareholders through dividends which might create tax benefits on the personal returns of the shareholders
Zagotti & Burdette understands the S corporation business structure and the tax options available to those who chose this form of business. We have many years experience guiding clients through the range of tax options available based on their individual circumstances and business plans.
We don’t just prepare your S corporation tax return, we look at the return holistically to provide tailored solutions just for you and your business.
Call (832) 800-3347 today to schedule your free appointment today.