An S-corp, or "Subchapter S corporation," is not a business structure in itself, but rather a tax election made with the IRS. This election allows a qualifying C-corp or LLC to be taxed under Subchapter S of the Internal Revenue Code, offering a way to avoid the "double taxation" often associated with traditional C-corporations. By electing S-corp status, profits and losses are "passed through" directly to the owners' personal income without being taxed at the corporate level first. This can lead to significant savings on self-employment taxes for business owners who pay themselves a reasonable salary. Forming a business entity like an LLC or a C-corp is the foundational step before you can elect S-corp status. The S-corp election is a tax designation granted by the IRS, not a state-level entity type. This means you first establish your business as an LLC or C-corp with your chosen state (e.g., Delaware, Wyoming, or Nevada), and then file the appropriate forms with the IRS to be treated as an S-corp for tax purposes. Lovie can help you establish your LLC or C-corp and guide you through the subsequent S-corp election process.
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