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?
Additional Information You May Find Useful
If you want additional information about how to maximize the tax savings related to running a business or investment venture, you may also be interested in one of our downloadable e-books (see descriptions below). Each book covers a category of tax planning topics that easily save a business owner significant amounts of income or self-employment taxes (potentially thousands of dollars a year) and is instantly downloadable.
Often the best tax saving tool private companies have? The Section 199A deduction which allows them to avoid taxes on the last 20 percent of their income.
Read More
Using an S corporation for your business? To maximize savings, you need to minimize the salary paid to shareholders. But this decision is tricky.
Read More
Nearly secret, the federal government's employee retention credits provide tremendous payroll tax savings for most small businesses... A new book from our firm explains.
Info here