S Corporation FAQ: Frequently Asked Questions
The list of questions below leads to pages that answer the most common questions I get from CPA firm clients and from website visitors. Therefore, if you have a question about forming, operating or ending an S corporation, the answer probably appears below.
However, if you truly do search through the questions and answers below and find that you can't find an answer to your general question, you can send your question to us using our contact form. If your question is of general interest, I'll add it to the list:
Background Incorporation Information
- What, exactly, is an S corporation?
- What does the label "Subchapter S" mean or refer to?
- Who can be an S corporation shareholder?
- Can sole proprietors become S corporations?
- Does an S corporation provide better limited liability protection than an LLC?
- Does an S corporation offer better tax savings than an LLC?
- Does a C corporation save the successful small business tax?
- What is a shareholders agreement?
- Can I incorporate an existing business?
- Does incorporating create a tax shelter?
- What is a qualified subchapter S subsidiary (aka QSUB or QSSS)?
- What is a disqualified S corporation?
- When is electing "Subchapter S" status a mistake?
- Will Stephen L. Nelson, CPA, PLLC provide consulting services?
Starting a New S Corporation
- What's a better platform for an S corp: An LLC or a regular corporation?
- Can I use an S corporation for real estate investing?
- Can I incorporate my business in another state?
- If I'm moving, in which state should I set up?
- Which state (Delaware? Nevada? My home state?) is best for incorporating?
- What if I missed the S election deadline--am I too late?
- With more than one business, should I have more than one corporation?
- Can I set up an S corporation without an attorney or accountant?
- Should I use an incorporation service to form an S corporation?
Operating an S Corporation
- What kind of accounting system is needed for a new corporation?
- Which tax-free fringe benefits can an S corporation provide to shareholder-employees?
- How do states treat S corporations?
- How does a shareholder make quarterly tax payments?
- How are S corporation dividends taxed?
- Does an S corporation complicate bookkeeping?
- How does an 1120S K-1 form work?
- How low can you set S corporation shareholder-employee salaries?
- How much tax can an S corporation really save its shareholders-employees?
- What pension plan options are good for small S corporations?
- How will the Obama healthcare legislation affect S corps?
- What happens if an S corporation loses money?
- When does an S corporation pay income tax?
- How does an S corporation extend its income tax return due date?
- How does an S corporation file its income tax return?
- Should an S corporation employ the owner's spouse or children?
- Can an S corporation be a member in an LLC?
Winding Down (Liquidating, Terminating S Corp Status, Etc.) an S Corporation
- How do I shut down an S corporation?
- Can you accidentally terminate the S Corporation status?
- Can I convert an S Corporation to a C Corporation?
DIY S Corporation Kits by State
We give away free downloadable LLC formation kits at our Evergreen Small Business blog. And an LLC is great starter platform for an S corporation. But if you're ready to set up our S corporation right now, use one of our downloadable kits.