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What is an S-Corporation?
An S-corporation is a regular corporation that has elected "S-corporation" tax status. Forming an S-corporation lets you enjoy the limited liability of a corporate shareholder but pay income taxes as if you were a sole proprietor or a partner.
In an S-corporation, all business profits "pass through" to the owners, who report them on their personal tax returns. The S-corporation itself does not pay any income tax.
Therefore, an S-corporation elects not to be taxed as a corporation.
After the corporation has been formed, it may elect "S-Corporation Status" by submitting IRS form 2553 to the Internal Revenue Service (in some cases a state filing is required as well).
