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Form Your S Corporation
Maximize Tax Savings
Elect S Corporation status and potentially save thousands in self-employment taxes while enjoying pass-through taxation. Perfect for profitable small businesses and consultants.
Trusted by over 1,000,000 entrepreneurs
What is an S Corporation?
An S Corporation is not a type of business entity, but rather a tax election made with the IRS. It allows a corporation or LLC to be taxed under Subchapter S of the Internal Revenue Code, providing pass-through taxation while potentially reducing self-employment taxes.
S Corp owners can pay themselves a reasonable salary (subject to payroll taxes) and take remaining profits as distributions (not subject to self-employment tax). This structure can result in significant tax savings for profitable businesses.
Business Profit: $150,000
*Example for illustration. Actual savings depend on your specific situation. Consult a tax professional.
Who Should Form an S Corporation?
S Corps are ideal for profitable businesses looking to optimize their tax situation while maintaining liability protection.
If your business consistently earns $50,000+ in profit annually, S Corp status can provide significant tax savings through salary/distribution splitting.
High-earning consultants and freelancers can save thousands by taking a reasonable salary and distributions instead of all self-employment income.
Doctors, lawyers, accountants, and other professionals can benefit from S Corp tax treatment while maintaining professional liability protection.
Existing LLCs with consistent profits can elect S Corp status to reduce self-employment taxes without changing their legal structure.
Business owners who want to optimize their tax situation and are willing to handle additional payroll and compliance requirements.
Companies that want the credibility of a corporation while maintaining pass-through taxation as they grow.
S Corporation Requirements
To qualify for S Corp status, your business must meet these IRS requirements.
Must be a corporation or LLC formed in the United States
Cannot have more than 100 shareholders (family members count as one)
Only individuals, certain trusts, and estates can be shareholders
Can only have one class of stock (voting rights can differ)
Cannot be a bank, insurance company, or certain other types
Must file IRS Form 2553 within 75 days of formation or by March 15
How to Form Your S Corporation
We handle the complexity so you can focus on your business.
First, we'll form your corporation or LLC in your chosen state. This creates the legal entity that will elect S Corp status.
- Corporation or LLC formation
- Articles of Incorporation
- State filing included
We prepare and file IRS Form 2553 to elect S Corporation tax status. This must be done within 75 days of formation or by March 15.
- IRS Form 2553 preparation
- Timely filing guaranteed
- State S Corp election if needed
We help you set up payroll for your reasonable salary and ensure you're ready for S Corp compliance requirements.
- Payroll setup guidance
- Compliance calendar
- Ongoing support available
Choose Your S Corp Package
All packages include entity formation and S Corp election filing.
- Corporation or LLC formation
- IRS Form 2553 preparation
- S Corp election filing
- Name availability check
- Online document access
- Everything in Basic
- EIN/Tax ID number
- Corporate bylaws/Operating Agreement
- Banking resolution
- FREE Registered Agent (1st year)
- Shareholder agreement template
- Priority processing
- Everything in Standard
- Expedited state filing
- Payroll setup consultation
- Tax planning consultation
- Business license report
- Compliance calendar & alerts
- Dedicated account manager
- Annual report filing
All packages include our 100% satisfaction guarantee
S Corp vs LLC: Which is Right for You?
Understand the key differences to make the best choice for your business.
Best For:
- Businesses with $50K+ annual profit
- Owners who can pay reasonable salary
- Those seeking self-employment tax savings
- Businesses with consistent income
Considerations:
Requires payroll setup, reasonable salary determination, and additional compliance. Best when tax savings exceed added costs.
Best For:
- New businesses still growing
- Businesses with variable income
- Those wanting simpler compliance
- Businesses with lower profit margins
Considerations:
All profits subject to self-employment tax, but simpler to manage. Can elect S Corp status later when profitable.
Not Sure Which is Right for You?
Our business formation experts can help you determine the best structure for your situation.
Frequently Asked Questions
Get answers to common S Corporation questions from our tax experts.
How much can I save with an S Corporation?
S Corp owners can potentially save $5,000 to $20,000+ annually in self-employment taxes. The savings depend on your profit level and reasonable salary. Generally, if your business profits exceed $50,000 annually, S Corp status may provide meaningful tax savings.
What is a 'reasonable salary' for S Corp owners?
A reasonable salary is what you would pay someone else to do your job. The IRS requires S Corp owner-employees to pay themselves a reasonable salary before taking distributions. Factors include industry standards, experience, time spent, and company revenue.
When should I elect S Corp status?
You can elect S Corp status when forming your entity or later. For existing entities, Form 2553 must be filed by March 15 for the current tax year, or within 75 days of formation for new entities. We can help with late election relief if needed.
Can an LLC elect S Corp status?
Yes! An LLC can elect to be taxed as an S Corporation by filing Form 2553 with the IRS. This gives you the liability protection of an LLC with the tax benefits of an S Corp. This is actually the most common way to get S Corp tax treatment.
What are the ongoing requirements for an S Corp?
S Corps must run payroll for owner-employees, file quarterly payroll taxes, maintain corporate formalities, file annual tax returns (Form 1120-S), and issue K-1s to shareholders. Our compliance services help you stay on track.
Can I have employees in an S Corp?
Yes, S Corps can have employees. In fact, owner-employees must be on payroll and receive a reasonable salary. You can also hire non-owner employees just like any other business structure.
What happens if I don't pay myself a reasonable salary?
The IRS can reclassify distributions as wages, resulting in back taxes, penalties, and interest. They may also audit your business. It's crucial to pay a reasonable salary to avoid these issues.
Can I convert my existing business to an S Corp?
Yes, existing corporations and LLCs can elect S Corp status. For corporations, file Form 2553. For LLCs, file Form 8832 (if needed) and Form 2553. We can help determine the best approach for your situation.
What's the difference between S Corp and C Corp?
S Corps have pass-through taxation (no corporate-level tax) while C Corps face double taxation (corporate tax plus dividend tax). S Corps have ownership restrictions (100 shareholders, one stock class) while C Corps don't. S Corps are better for small businesses; C Corps for those seeking investors or going public.
Do I need a separate bank account for my S Corp?
Yes, you should maintain a separate business bank account for your S Corp. This helps maintain the corporate veil, simplifies accounting, and is required for proper payroll and tax compliance.
How are S Corp distributions taxed?
S Corp distributions are generally not subject to self-employment tax (saving you 15.3%). However, they are still subject to income tax. The key benefit is avoiding the self-employment tax portion on distributions above your reasonable salary.
Can I lose my S Corp status?
Yes, S Corp status can be revoked or terminated if you violate eligibility requirements (e.g., exceed 100 shareholders, have ineligible shareholders, create a second class of stock). We help you maintain compliance to protect your status.
What if my S Corp has a loss?
S Corp losses pass through to shareholders and can offset other income, subject to basis and at-risk limitations. This is one advantage of pass-through taxation - you can potentially use business losses to reduce your personal tax liability.
Do I need an accountant for my S Corp?
While not legally required, we strongly recommend working with a tax professional for S Corp compliance. The payroll requirements, reasonable salary determination, and tax filings benefit from professional guidance to maximize savings and avoid issues.
How long does S Corp election take to process?
The IRS typically processes Form 2553 within 60 days. You'll receive a determination letter confirming your S Corp status. We offer expedited processing and can help with late election relief if you missed the deadline.
Success Stories
Real experiences from business owners who saved with S Corp status.
IT Consultant
"Switching to S Corp status saved me over $15,000 in self-employment taxes last year. The team made the process simple and helped me determine the right salary structure."
Marketing Agency Owner
"As my agency grew, the tax savings from S Corp election became significant. Cannki Kicker handled everything from formation to payroll setup. Highly recommend!"
Real Estate Agent
"I was skeptical about the complexity, but the team walked me through everything. Now I'm saving thousands each year and my business looks more professional to clients."
Why Choose Our S Corp Service?
Experience the most comprehensive S Corporation formation service available.
Tax Savings Expertise
Our team understands S Corp tax strategies and helps you maximize your savings while staying compliant.
Fast Processing
Get your S Corp formed and election filed quickly. Same-day processing available for urgent needs.
Compliance Support
We help you understand and meet ongoing S Corp requirements including payroll and tax filings.
Dedicated Support
Our business formation experts are available to answer questions and guide you through the process.
Secure & Confidential
Bank-level encryption protects your information. We never sell your data to third parties.
Proven Track Record
Join over 200,000 business owners who have trusted us with their S Corp formation.
Ready to Save on Taxes?
Join over 200,000 business owners who have saved thousands with S Corporation status. Start your S Corp today and keep more of what you earn.