The business structure that could save you thousands in taxes...

Описание: Are you a business owner considering forming an S-Corp?

In this video, the XQ CPA team breaks down what an S-Corp is, the advantages and disadvantages of organizing your company as an S-Corp, how to tell if you should consider an S-Corp and how to create one with the IRS.

S-Corporations are not actually a type of business structure, they are a tax designation that any eligible corporation, either an LLC or C-Corp, so long as they meet the criteria set forth by the IRS. The primary tax advantages of S-Corps over LLCs and C-Corps are that S-Corps are not affected by double taxation like C-Corps are, and they reduce the amount of self-employment taxes you are obligated to pay. This is achieved because S-Corps distribute profits as distributions to shareholders which are not affected by self-employment taxes.

Note that if you are a shareholder and an employee of the S-Corp, you cannot avoid self-employment taxes entirely as the IRS mandates that shareholder-employees be paid a “reasonable salary” before distributions. This salary will be affected by self-employment taxes.

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DISCLAIMER:
Tax Tips discussed here were prepared for the purpose of this video. To apply these strategies, please consult with your CPA or professional tax preparer.