S-Corporations = Tax Savings for Small Businesses(2-10-2009)

The deadline to elect S-Corporation status from the federal government is
March 16, 2009. Now is the time to consider whether your corporation or LLC should make this tax election.

What is an S-Corporation? What are the benefits?
An S-Corporation starts out as a C-corporation or LLC. Choosing S-Corporation taxation avoids traditional "double-taxation" for corporations by allowing profits to "pass-through" and be reported on shareholder's individual tax returns. LLCs can benefit from being taxed as an S-Corporation by reducing self-employment taxes on salaries paid to the owner(s).

Self-employment tax savings
In an S-Corporation, only earnings paid to an owner as salary is subject to payroll taxes. Any money left in the business for reinvestment or distributed to the shareholder as a dividend is not subject to self-employment tax.

Maria is a sole proprietor bringing in sales of $90,000. After she pays her costs & expenses, her profit is $60,000.
As a sole proprietor, she is required to pay self- employment tax of 15.3% on this entire $60K of profit, which equates to $9,180.

Now, let's assume Maria formed an S-Corporation for her business, and chooses to pay herself $35K for the year in salary, and take the remaining $25K of profit through a distribution. She still earns the same $60K in profit.

But, let's look at the tax situation. Because corporations only pay Social Security & Medicare taxes on salaries, she's only liable for $5,355, saving over $3,800 in taxes!

Steps to become an S-Corporation

For existing corporations and LLCs, call us at 1-877-692-6772 to get started on the filing process right away. Please have your Entity Formation Date and State of Formation when you call.

If you do not have a corporation or LLC yet, MyCorporation can help file the paperwork for FREE. Call or visit us online at MyCorporation.com to find out about FREE Corps and LLCs. When placing your order, don't forget to select/mention "S-Corporation: Have MyCorporation Do It" when asked. The S-Corporation request will be processed once the formation of the corporation or LLC is completed at the state.

Learn More About S-Corporations

* FREE Corps and LLCs: Must use coupon MYFREE to obtain discount. Document shipping, state fees, publication fees, and additional product fees are additional. Discount valid for orders placed for a new corporation or limited liability company only. Prices subject to change without notice. Limit one discount or coupon per order. Coupon is not valid on any other product or service. You must enter/mention the coupon code at the time your order is placed. Coupon or discount is not valid on previous orders. Refunds/credits/adjustments will not be issued on prior orders.

IMPORTANT DISCLAIMER
MyCorporation is a document filing service and CANNOT provide you with legal or financial advice. The information on the website is designed to provide accurate and authoritative information in regard to the subject matter covered. It is presented with the understanding that MyCorporation is not engaged in rendering legal, accounting or other professional services. If legal advice or other professional assistance is required, the services of a competent professional person should be sought.
--From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.

Copyright © 2009, Intuit, Inc. MyCorporation.com All Rights Reserved.

MyCorporation
Email: CustomerSupport@MyCorporation.com
Address: 21215 Burbank, Suite 400, Woodland Hills, CA 91367

1 (877) 692-6772 (Se Habla Español)

Call M-F 7AM to 5PM PT

Terms and conditions, features, support, pricing and service options subject to change without notice.
2009 Intuit, Inc. All rights reserved. Intuit and QuickBooks are registered trademarks of Intuit, Inc.
Copyright © 1997-2009, Intuit, Inc. MyCorporation All Rights Reserved.

MyCorporation is a Document Filing Service and CANNOT provide you with legal or financial advice. The information on the website is designed to provide accurate and authoritative information in regard to the subject matter covered. It is presented with the understanding that MyCorporation is not engaged in rendering legal, accounting or other professional services. If legal advice or other professional assistance is required, the services of a competent professional person should be sought. From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.