| An S corporation is a type of corporation that the IRS | | | | the IRS by filling out the necessary forms in your state, |
| recognizes. S corporations follow taxation rules that | | | | as well as federal. |
| differ from those that regular corporations follow. A | | | | If you choose to obtain an S corporation status, every |
| main difference is that S corporations are exempt | | | | shareholder in your corporation must apply within 90 |
| from double taxation. This is because the owner | | | | days from the beginning of the fiscal year. Once you |
| declares the income a corporation receives in individual | | | | have been approved as an S corporation, you may |
| tax returns. Corporations are not subjected to taxation | | | | keep that status for as long as you wish. To revoke |
| of the income. The taxation rules follow those of sole | | | | your S corporation status, you need to send a letter of |
| proprietorship and partnership businesses. However, | | | | revocation to the state revenue department and the |
| they enjoy the limited liability (protection) corporations | | | | federal IRS. All shareholders must sign the letter. |
| receive. | | | | Every state has different rules and regulations |
| To apply for an S corporation status, you need to | | | | pertaining to an S corporation status. You will need to |
| incorporate your business. To do this, you need to file | | | | fill out different forms for different states. The one |
| formal paperwork called the "articles of incorporation" | | | | requirement that is consistent to every state is that |
| and pay the appropriate fees. Once you have done | | | | you first need to register with the IRS to become |
| the necessary steps to incorporate, you will be able to | | | | eligible for an S corporation status in any state. |
| apply for an S corporation tax status. You do so with | | | | |