What is an S Corporation?
S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. The shareholders of S corporations report all income and losses on their personal tax returns. To be an S corporation, a business needs to be set up as a corporation by filing and submitting the appropriate documents and forms. However, there are certain requirements corporations must meet to qualify.
According to the Internal Revenue Service, the corporation must meet the following to qualify as an S corporation:
- Have only one class of stock
- Have nor more than 100 shareholders
- Must be a domestic corporation
- Not be an ineligible corporation
- Have only allowable shareholders
When is the S Corporation Filing Deadline?
If you are interested in the S Corporation for your business, it is important to keep in mind that there is a deadline to apply. If you already have an existing corporation, the S Corporation filing deadline is crucial. All owners will need to ensure that all S Corporation income tax returns are filed each year, including all the other IRS forms. Generally, March 15 is the deadline for most corporations. If the company fails to file by March 15, then the company can request a six-month extension by filing Form 7004 with the IRS.