S corporation
An S corporation is like a special club for companies. The club has special rules and if your company follows them, it can become part of the club! The members of the club are treated differently from other companies that are not in the club.
When a company becomes part of the club, it can avoid paying federal income taxes. Instead, the taxes go to the individual owners of the company. This means that the profits and losses of the company are passed through to the individual owners and they have to pay taxes on their share.
But not all companies can join the club. To be part of the club, the company needs to be small, have less than 100 shareholders, and meet some other special requirements.
Being part of the S corp club can be really beneficial for small businesses because it can help them save money on taxes. But it's important to follow all the rules of the club and talk to a tax professional to make sure it's the right fit for your company.
When a company becomes part of the club, it can avoid paying federal income taxes. Instead, the taxes go to the individual owners of the company. This means that the profits and losses of the company are passed through to the individual owners and they have to pay taxes on their share.
But not all companies can join the club. To be part of the club, the company needs to be small, have less than 100 shareholders, and meet some other special requirements.
Being part of the S corp club can be really beneficial for small businesses because it can help them save money on taxes. But it's important to follow all the rules of the club and talk to a tax professional to make sure it's the right fit for your company.