Can you tell me about an S-Corp?
Generally speaking, when creating a new business, your choices are to form a corporation or a limited liability company. If you form a corporation, after forming the entity you can apply with the Internal Revenue Service to elect to be taxed as an “S Corp”. Then, in most states, like New Jersey, after being approved by the Internal Revenue Service as an S Corp, you then have to file with the state of New Jersey and apply to be recognized as an S Corp for state taxation purposes. This may sound like a lot of trouble, but the benefits to you as a shareholder are large. It saves you from potentially being double taxed on the corporation’s incomes and losses, since taxes on the income of the corporation is generally only paid at the shareholder level not both the corporation and shareholder levels. Additionally, it allows the corporation’s income and losses to flow through to the shareholders individually, based on their share ownership of the corporation. Therefore, typically if yo...