prietor or a partner. Unlike a regular corporation, the S-corp itself does not pay any income tax. Here’s a closer look at some of the perks involved with forming this kind of business entity.

S-Cor

As small business owners, we all have at least two things in common when it comes to our companies: Keeping other people’s hands off our personal assets and paying the lowest possible taxes (this usually means having profits taxed on our individual tax returns.) That’s what the S-corporation is all about. While the limited liability company (LLC) is quickly taking its place, S-corporation benefits still do outweigh LLC benefits for many companies. But how do you know it’s right for you? Let’s take a look.

What is an S-Corp Exactly?

An S-corporation is basically a regular corporation (or C corporation) that decides to go with a special tax status. Forming an S-corporation lets you enjoy the limited liability of a regular corporate shareholder while paying income taxes as if you were a sole proprietor or a partner. Unlike a regular corporation, the S-corp itself does not pay any income tax. Here’s a closer look at some of the perks involved with forming this kind of business entity.

S-Cor

means having profits taxed on our individual tax returns.) That’s what the S-corporation is all about. While the limited liability company (LLC) is quickly taking its place, S-corporation benefits still do outweigh LLC benefits for many companies. But how do you know it’s right for you? Let’s take a look.

What is an S-Corp Exactly?

An S-corporation is basically a regular corporation (or C corporation) that decides to go with a special tax status. Forming an S-corporation lets you enjoy the limited liability of a regular corporate shareholder while paying income taxes as if you were a sole proprietor or a partner. Unlike a regular corporation, the S-corp itself does not pay any income tax. Here’s a closer look at some of the perks involved with forming this kind of business entity.

S-Cor

do outweigh LLC benefits for many companies. But how do you know it’s right for you? Let’s take a look.

What is an S-Corp Exactly?

An S-corporation is basically a regular corporation (or C corporation) that decides to go with a special tax status. Forming an S-corporation lets you enjoy the limited liability of a regular corporate shareholder while paying income taxes as if you were a sole proprietor or a partner. Unlike a regular corporation, the S-corp itself does not pay any income tax. Here’s a closer look at some of the perks involved with forming this kind of business entity.

S-Cor

poration) that decides to go with a special tax status. Forming an S-corporation lets you enjoy the limited liability of a regular corporate shareholder while paying income taxes as if you were a sole proprietor or a partner. Unlike a regular corporation, the S-corp itself does not pay any income tax. Here’s a closer look at some of the perks involved with forming this kind of business entity.

S-Cor

prietor or a partner. Unlike a regular corporation, the S-corp itself does not pay any income tax. Here’s a closer look at some of the perks involved with forming this kind of business entity.

S-Corporation Benefits:

• Less Risk. An S-corp is said to have less risk from government audits as a corporation, as opposed to sole proprietor or LLC.

• Minimal Liability. As mentioned earlier, this is one of the biggest S-corporation benefits – having limited personal liability for business debts.

• Flexibility. With an S-corp, owners can use corporate losses to offset income from other states.

• Tax Benefits. You can save on employment taxes by taking distributions instead of salary. And with an S-corporation, there is no double taxation threat because the corporation is not a separate taxable entity. (I should mention that a handful of states do tax an S-corp like a regular corporation. You can check with your state treasury department to see if yours is one of them.)

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