Small Business Investing

Starting a Business

What is an “S” corporation?

Under their bylaws, S corporations elect to pass through corporate income, losses, deductions, and credit to their shareholders for federal tax purposes. S corporation share-holders report the flow-through of income and losses on their personal tax returns, and are assessed taxes at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible to pay tax on certain gains in the value of their equity and passive income they may realize throughout the year.


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