{"id":7025,"date":"2026-02-05T13:51:32","date_gmt":"2026-02-05T19:51:32","guid":{"rendered":"https:\/\/www.blockadvisors.com\/resource-center\/?p=7025"},"modified":"2026-02-25T12:57:35","modified_gmt":"2026-02-25T18:57:35","slug":"s-corp-filing-guide","status":"publish","type":"post","link":"https:\/\/www.blockadvisors.com\/resource-center\/manage-your-business\/s-corp-filing-guide\/","title":{"rendered":"S Corp filing: Tax information small business owners need to know"},"content":{"rendered":"\n

If you\u2019ve ever wondered how to start an S Corp, look no further. S Corp tax benefits can be substantial, so business owners should know about the S Corp business structure and advantages of becoming an S Corporation. This guide will walk future S Corporation owners through S Corp filing information and three steps for creating an S Corp.<\/p>\n\n\n\n

What is an S Corporation?<\/strong><\/h2>\n\n\n
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An S Corporation, or S Corp, is a tax election that allows a business to qualify for special pass-through taxation status. If you’re a new business owner, distinguishing between S Corp, C Corp, and Limited Liability Company (LLC) can be confusing. The critical thing to know is that an S Corp is not a business structure. It’s a tax status, or election, with its own set of advantages and restrictions for tax purposes. Both LLCs and corporations can complete the S Corp election process. Most U.S.-based entities can apply for S Corp status if they meet S Corp shareholder requirements.<\/p>\n\n\n\n

S Corporation shareholder requirements include having no more than 100 S Corp shareholders, who all must be individual US citizens. Additionally, the S Corp can only have one class of stock, and certain types of businesses, such as financial institutions and insurance companies, are ineligible.<\/p>\n\n\n\n

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What structure is right for my business? <\/h3>

Answer these six questions to help you find your fit <\/p>

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Take the quiz<\/a><\/div>\n<\/div><\/div><\/div>\n\n\n\n

Advantages of becoming an S Corp<\/h2>\n\n\n\n

Why would you want your small business to take an S Corporation election? There are a few advantages.<\/p>\n\n\n\n

The primary benefit of starting an S Corp is that business revenue becomes eligible for pass-through taxation. Another plus is that the business\u2019s profits are not subject to self-employment taxes. The difference in self-employment taxes an owner pays when filing taxes as an S Corp vs. LLC<\/a> can be substantial.<\/p>\n\n\n\n

Looking for another upside? How about this: Once the IRS approves a business\u2019s S Corp filing, the S Corp owner can begin paying themselves a reasonable salary. It\u2019s important to note that a \u201creasonable salary\u201d is defined on a case-by-case basis<\/a> and should reflect the value of the work completed by the owner. Generally, a reasonable salary is about 40%-60% of company profits for a business with a single owner and no employees.<\/p>\n\n\n\n

<\/a>How to start an S Corp<\/h2>\n\n\n\n
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