Tax Issues & Services

There are potentially two important IRS tax form documents that you may need for your corporation or LLC.

Employer Identification Number (EIN)
MyCorporation files for businesses that need an EIN using IRS Tax Form SS-4.

An EIN is a federal identification number issued by the IRS to identify a business entity. It is also known as a Tax ID number. Legally, you are required to identify your business with one of two numbers: either your social security number or an EIN.

Generally you need an EIN when your business:

  • Is new
  • Hires, or will hire, employees
  • Is an LLC or Corporation
  • Opens a bank account
  • Changes type of organization

If you are a sole proprietor, your social security number can be used on all of your government forms and other official documents, but most small business advisors recommend that you apply for an EIN and use that number instead.

Furthermore, banks require an EIN in order to open a business bank account.

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S-Corp Elections
MyCorporation will help you prepare IRS Form 2553 with the IRS to elect S-corporation status.

Electing S-corp status means that income generated by your business is "passed-through" to your shareholders for computing tax liability.

Most businesses start out as a general C-corporation and are required to pay income tax on taxable income generated by the corporation.

However, as soon as a corporation has been formed, it may elect S-Corporation status by submitting IRS Form 2553 to the IRS. Then, the shareholders are taxed like a partnership or sole proprietorship, and not the corporation.

A large majority of our small business customers meet the following S-corporation requirements:

  • First be filed as a U.S. corporation
  • Maintain only one class of stock
  • Maintain a maximum of 100 shareholders
  • Be comprised solely of shareholders who are individuals, estates or certain qualified trusts, who consent in writing to the S corporation election
  • Not have a shareholder who is a non-resident alien

Failure to observe any of the above requirements could revoke your S-corporation status at any time.

Whether or not an S-corporation is something that you would benefit from is a decision that only you can make. Please consult your lawyer or CPA for details.

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