In US law, corporations are organizations authorized to act as a legal entity. US and state tax laws allow a special ‘S Corporation’ tax status that changes how corporate taxes are handled. The government taxes regular ‘C’ corporations directly on their profits, under corporation-specific laws. Individual income tax only applies to money that owners receive from the corporation, such as salaries and dividends. ‘S’ corporations do not pay taxes directly. Their profits or losses ‘pass through’ to the owners’ personal tax returns. This makes them similar to LLCs tax-wise. S status can be ‘elected’ by the shareholders, if the restrictions for S corp status are met. S corps can also un-elect S-corporation status, and revert to ordinary ‘C’ corporation taxes.
Latest posts by TitleTap (see all)
- TitleTap Launches HUB Making Website Integrations Easier For Customers and Industry Partners - April 1, 2021
- 7 Things Your Title Company or Law Firm’s Website Needs Due To The Pandemic - March 12, 2021
- Why most service businesses should never pay a local marketing firm for a custom website… - March 9, 2021