An S-corporation (S-corp) is not a business entity type like an LLC or a C-corporation. Instead, it's a tax designation granted by the IRS to eligible corporations or LLCs that elect to be taxed under Subchapter S of the Internal Revenue Code. This election allows profits and losses to be passed through directly to the owners' personal income without being subject to corporate tax rates. This can often result in significant tax savings for small business owners compared to being taxed as a C-corp, where profits are taxed at the corporate level and again when distributed to shareholders. Forming a business entity such as an LLC or a C-corp is the first step, and then electing S-corp status is a subsequent tax decision. Lovie assists entrepreneurs in forming these core business structures across all 50 states, providing the foundation upon which an S-corp election can be made. Understanding the nuances of S-corp taxation is crucial for optimizing your business's financial health and ensuring compliance with IRS regulations.
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