The entity structure and nature of your business are factors that determine your tax filing requirements.
S Corporations are a great option for lifestyle businesses
President Dwight Eisenhower and Congress were successful in creating a hybrid entity that helped small business owners in the U.S.
With most featuring three or fewer shareholders, very few S Corporations have to worry about the hurdles surrounding who can be a shareholder, the number of shareholders, being based in the U.S., and having only one class of stock.
That’s why the S Corporation is a perfect fit for these lifestyle businesses whose owner has no grand ambition to grow the business as large as possible and attract as many investors as possible.
S Corporation Tax Filing
An S Corporation files its tax return on Form 1120-S. Each shareholder receives a Form K-1 from the S Corporation. K-1s report each shareholder’s allocation of income, losses, and other financial information from the business. The shareholder includes Form K-1 information on their individual tax return.
This section discusses filing an S Corporation tax return and the associated Form K-1s. If you have an S Corporation, please contact our office with any questions about how to file a Form 1120-S or how to include a Form K-1 on your individual tax return.