Should You Form an S Corporation?
Fun Fact...It's not actually a corporation at all! Here's what you need to know about this secret "company" that can save you money on taxes each year:
An S Corporation isn't a company, it's a tax designation. You can add it to an existing LLC or C Corporation
It typically saves you money on taxes each year. In a typical company, you’re taxed on your profits. However, in an S Corporation, you’re only taxed on your reasonable salary…which is usually a smaller amount.
It's easy to do: you need to fax one form to the IRS
It requires more bookkeeping or the help of an accountant. For this reason, it's generally recommended for companies that have annual profits over $150,000.
It's not an option if you're looking for foreign investors. You can't have more than 100 investors and all must be US citizens or residents.
*Disclaimer: this is not tax advice. Please talk to your accountant if you have questions on whether this is the right fit for you.