S Corp Tax Entity for Your Start-Up or Small Business?
Lean on the Experience an Award Winning Greater Pittsburgh Accounting Firm, your local experts in Corporate Taxation, to advise your “S Corporation”
An S Corporation (“S-Corp”) is a pass-through entity: shareholders pay taxes on corporate net income personally.
Closely held corporations may elect to be taxed as federal or state S corporations, which can have tax advantages. Any business income or loss is “passed through” to shareholders who report it on their personal income tax returns. This means that business losses can offset other income on the shareholders’ tax returns. This can be extremely helpful in the startup phase of a new business.
One of the most important decisions a new business will make is selecting an appropriate tax entity. The form of tax entity that is chosen will have a major impact on future outlays to Uncle Sam.
Closely held corporations may elect to be taxed as federal or state S corporations, which permit shareholders to pay taxes on corporate net income personally, as if it were a partnership. S corporation status is limited to corporations that have no more than 100 shareholders. A Pennsylvania corporation cannot elect to be an S corporation unless it has also applied for federal “S” status.
To apply for Pennsylvania “S” status, file with the Pennsylvania Department of Revenue within 75 days of the beginning of your fiscal year. When you receive a copy of your federal notification of approval from the IRS, you must furnish a copy to the Pennsylvania Department of Revenue. S corporations are responsible for filing and paying the Capital Stock and Foreign Franchise Tax.
Dennis Piper & Associates Provides Business Consulting, Tax Planning and Tax Return Preparation for Start-Ups and Small to Medium Businesses
- Business Start-Up Consulting: Lean on our expertise as you choose your business entity, tax structure, and accounting, business and management software. We will help you with everything to get your business up and operational.
- Small to Medium Businesses: Have you outgrown your existing accounting and tax service provider? We provide auditing services, as well as complex tax and business consulting.