Glossary of Terms

S Corporation 2019-10-10 08:00:00

S Corporation

An S corporation is a type of corporation with less than 100 shareholders that files corporate taxes and allows a firm to pass business income, losses, deductions and credits to the firm’s shareholders. S corporations do not pay taxes at the federal level, which is particularly beneficial to a business recently established that seeks to grow. An S corporation allows a firm to characterize distributions as salary or dividends, thus allowing the S corporation to reduce its tax liability.