S Corporations
S corporations are corporations that elect to pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income.
To qualify for S corporation status, the corporation must meet the following requirements:
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Be a domestic corporation
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Have only allowable shareholders
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including individuals, certain trust, and estates and
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may not include partnerships, corporations or non-resident alien shareholders
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Have no more than 100 shareholders
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Have one class of stock
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Not be an ineligible corporation i.e. certain financial institutions, insurance companies, and domestic international sales corporations.
In order to become an S corporation, the corporation must submit Form 2553 Election by a Small Business Corporation (PDF) signed by all the shareholders.
Filing Requirements:
| If you are an S corporation then you may be liable for... | Use Form... | Separate Instructions... |
|---|---|---|
| Income Tax |
1120S (PDF) |
Instructions for Form 1120S (PDF) |
| Estimated tax | 1120-W (PDF) (corporation only) and 8109 | Instructions for Form 1120-W (PDF) |
|
941 (PDF) ( 943 (PDF) for farm employees) 940 (PDF) |
Instructions for Form 941 Employers QUARTERLY Federal Tax Return (PDF) Instructions for Form 940 Employers Annual Federal Unemployment (FUTA) Tax Return (PDF) |
| Excise Taxes | Refer to the Excise Tax web page |
|
|
If you are an S corporation |
Use Form... | Separate Instructions... |
|---|---|---|
| Income Tax | 1040 and Schedule E (PDF) | Instructions for Schedule E (Form 1040)Supplemental Income and Loss (PDF) |
| Estimated tax | 1040-ES (PDF) |
|
References/Related Topics
- Form 1120S, U.S. Income Tax Return for an S Corporation
- S Corporation Compensation and Medical Insurance Issues
- S Corporation Employees, Shareholders and Corporate Officers
- S Corporation Stock and Debt Basis
- Special Rules for Health Insurance Costs of 2-Percent Shareholder-Employees (IRB 2008-2 Notice 2008-1)
- Other Business Structures
- Where to File Tax Returns - Addresses Listed by Return Type
- e-file for Business and Self-Employed Taxpayers
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