Have you heard the latest benefits of forming an S-Corporation, but you’re still confused on if it is the next best step for your business?

Have you tried to determine your reasonable salary compensation and completed the required IRS form, but find yourself stressed out?

Don’t be intimidated about forming an S-Corporation, and don’t allow the misinformation from colleagues, friends, and family to prevent you transforming your organization.  We’ll help remove the stress and uncertainty of forming an S- Corporation and provide you with everything you need to remain in compliance with all Federal and State agencies.

Select S-Corp Formation Option

What is an S-Corporation?

S-corporation stands for “Subchapter S-corporation.”   An S-Corporation is a business that elects to pass the corporate income, losses, deductions, and credits to their shareholders.

Advantages Of An S-Corporation

• An S-Corporation’s main advantage is that it’s only taxed once according to section S of the Internal Revenue Code; therefore the S-Corporation does not pay federal income taxes.
• The corporation “elects” to pass on its income, losses, deductions, and credits to its shareholders for tax purposes. This pass-through taxation allows the corporation to avoid paying double taxes on income.
• As an S-Corporation, your company can attract investors by offering shares of stock in exchange for capital to fund continuous growth.
• The business can continue to operate even after the owners depart.
• If you ever decide to sell your business, you’ll pay a lot less in taxes when selling an S-Corporation than selling a C-Corporation.
• S-Corporation provides personal liability and asset protection that prevents the officers, directors, and shareholders from being held responsible for its debts.

Disadvantages of An S-Corporation

• Because the S-Corporation status allows for distributions to a shareholder, the IRS scrutinizes payments to make sure the characterization conforms to reality.
• The IRS can revoke the S-Corporation status and assess back taxes for 3 years and impose a further 5-year waiting period to regain the tax status, if the company doesn’t adhere to the tax rules and compensation requirement.
• The IRS keeps a close eye on whether the officers are paying themselves a “reasonable” salary.
• S-Corporations are not treated equally by each state government.

How An S-Corporation Will Help You Save Taxes?

Use the example below to understand the tax-saving benefits of becoming an S-Corporation.

Sabrina is the owner of Specialty Imports.  Last year Sabrina earned $550,000 in Gross Revenue that resulted in $175,000 remaining in Net Profit.  ($550,000 Gross Revenue – $320,000 Annual Expenses = $230,000 Net Profit).

Estimated Business Tax Savings

When to File an S-Corporation?

For the S-Corporation to take effect in the current calendar year, you want to file no later than two months and 15 days after the start of the tax year when the election is to take effect.

If you desire to file after the deadline, you have the option to have your S-Corporation retroactive by filing and receiving IRS Relief.

Requirements For Becoming an S-Corporation

 To qualify for S-Corporation status, the corporation must:

• Be formed as an LLC or C Corporation first.
• Be a domestic corporation.
• The shareholders must be individual U.S. citizens or green-card holders (resident aliens).
• The S-Corporation can not have more than 100 shareholders.
• Have only one class of stock.
• All shareholders must consent to become an S-Corporation in writing.

How Mapade Management Can Assist with becoming an S-Corporation?

Over the years, we have assisted several business owners across the United States with achieving their S-Corporation status, and we’d be happy to assist you as well.

Please review our S-Corporation Service Options below and schedule a session with us today.