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An S corporation (or S Corp), for United States federal income tax, is a closely held corporation (or, in some cases, a limited liability company (LLC) or a partnership) that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. [1] In general, S corporations do not pay any income taxes.
After electing corporate tax status, an LLC may further elect to be treated as a regular C corporation (taxation of the entity's income prior to any dividends or distributions to the members and then taxation of the dividends or distributions once received as income by the members) or as an S corporation (entity level income and loss passes ...
An S corporation is a special form of corporation designed for smaller companies. They can only have a maximum of 100 shareholders. ... LLCs can elect to be taxed as S corporations, which can ...
This entity classification election is made by filing Internal Revenue Service Form 8832. Absent filing the form, a default classification applies. U.S. corporations of the type that can be publicly traded must be treated as corporations. There is a list of specific foreign entities that must be treated as corporations. [2]
A C corporation is distinguished from an S corporation, which generally is not taxed separately. Many companies, including most major corporations, are treated as C corporations for U.S. federal income tax purposes. C corporations and S corporations both enjoy limited liability, but only C corporations are subject to corporate income taxation. [1]
The manner of the election varies in accordance with state law. For example, in Delaware LLLP elections take the form of a limited partnership electing to be a limited liability partnership (this is the format used in Delaware, while in Florida, Hawaii and Kentucky the election is made in the certificate of a limited partnership).
After Trump’s veto was overridden, Texas Top Shop, Inc., et al., sued U.S. Attorney General Merrick Garland. Texas Attorney General Ken Paxton filed an amicus brief in support of Texas businesses.
By 2017, pass-through businesses earned the "majority of business income" in the United States and "owners of S-corporations and partnerships now earn about half of all income from businesses." [ 8 ] According to a September 2017 article in The New York Times , about "95 percent of companies in the United States are structured as pass-through ...