An S Corporation (S Corp) is a special tax designation by the IRS, not a business structure type like an LLC or C Corp. Businesses that qualify can elect S Corp status to potentially avoid double taxation, a common concern for C Corporations. This election allows profits and losses to be passed through directly to the owners' personal income without being subject to corporate tax rates. Understanding the requirements and the process is crucial for business owners looking to optimize their tax situation. Setting up an S Corp involves two primary steps: first, forming a legal business entity such as an LLC or C Corp with your state, and second, filing the appropriate election with the IRS. While Lovie can help you form your LLC or C Corp efficiently in all 50 states, the S Corp election is a federal tax matter handled directly with the Internal Revenue Service. This guide will walk you through the essential steps and considerations for making this election.
Start your formation with Lovie — $29/month, everything included.