S-Corporation Tax Preparation in Las Vegas, NV

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S Corporation Tax breaks

An S Corporation is a pass-through entity. Corporations set up this way share the income, deductions, profits, and losses of a corporation with its owners. There is no federal corporate tax. Shareholders file their taxes including the profit or loss from the S Corp. This allows S Corps to avoid double taxation on the corporate income, unlike C corporations which are subject to corporate income tax at both the corporate and individual levels.

S Corporations must elect this status under the Internal Revenue Code to benefit from pass-through taxation.

Also, unlike Sole Proprietors or Partnerships, S Corp Shareholders do not pay Self Employment Tax (15%) on the income they receive from corporate profit. Therefore, the S Corp is generally the best choice for a small business. There are advantages to each different type of entity, however, and our EA/CPA/Tax Attorney team would be glad to advise you on the pros and cons of each for your individual situation, including the process of electing S Corporation status and its implications.

Profitable S Corporations generally have employees and payroll taxes need to be filed. In this case, the company is responsible for withholding federal income tax, Social Security and Medicare taxes from paychecks and filing tax forms 940 and 941 in addition to the 1120S Income Tax Return for an S Corporation. Shareholders pay federal income tax on their share of the profits, which helps avoid double taxation.

Many small businesses would benefit financially from being an S Corp but are worried about the extra paperwork. Proper bookkeeping, accounting, payroll, and filing the Payroll Tax forms 940 and 941, in addition to the corporate tax return 1120S can be daunting. Late filings and such are severely penalized.

Torchlight Tax & Accounting Las Vegas understands that you may not want to take on these administrative burdens. In most cases, we can set up a package service for S Corp, Bookkeeping, Accounting, Payroll, and corporate tax filings that costs a fraction of the savings you get. Moreover, with these issues off your plate, you can concentrate on increasing your profit, which will be facilitated by knowing accurately what your profit is, as your books are being kept up.

To qualify for S Corporation tax filing you must:

  • Be a domestic corporation
  • Have only allowable shareholders
  • May be individuals, certain trusts, and estates
  • May not be partnerships, corporations, or non-resident alien shareholders
  • Have no more than 100 shareholders
  • Have only one class of stock
  • Not be an ineligible corporation (i.e., certain financial institutions, insurance companies, and domestic international sales corporations)

Meeting these qualifications is essential to elect S Corporation status. Additionally, it is important to make the election within the specified tax year to ensure timely and proper tax treatment.

Saving Tax Dollars by Learning How to Pay Federal Income Tax Efficiently

If you are not already an S Corporation, becoming one can result in a substantial tax savings by splitting business income into salary and distribution components to reduce self-employment tax.

If you are already an LLC or Corporation, we may be able to save you substantial tax dollars by doing a late election to the IRS and getting it approved, affecting how the corporation’s income is taxed at both the corporate and shareholder levels.

In any event, we can assist you in saving tax dollars by making sure your entity selection is correct and by filing your taxes expertly to legally save you tax dollars. Electing S corporation status can result in savings on federal income taxes, as S corporation profits are only taxed once on the shareholders’ personal tax returns. The S corporation’s income flows through to the shareholders, who then report the taxable income or loss on their own tax returns.

For help in filing your corporate taxes, or to see if Torchlight Tax and Accounting Las Vegas is a good fit for you, contact us at 1-877-758-7797 or 702-463-1818 or email us at info@TorchlightTax.com. We can transfer your call to a branch office near you or help you directly from our central office. Free consultations are available.

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    When doing current taxes, we often come across missed tax savings from prior years. When this happens, the Internal Revenue Service allows you to amend your taxes and lower your tax liability. Whether you or your prior tax preparer missed a W-2 or 1099, a revised 1099. large charitable donations, or made some other error, amending your tax return can help you recover the money you are rightfully owed. When we find this situation, we will advise you on potential savings and amend the previously filed tax return.

    Sometimes, there may be a situation where a tax return could be amended, but it is too late to receive any benefit. Or maybe you made an error that was missed by the IRS that would have increased your tax liability. In some cases, it is prudent to file an amended return. But if it is not necessary and will not save you any money or decrease your risk, we will tell you not to bother. It is silly to amend a return to no advantage which is too old for the IRS to audit. Some firms might file a bunch of unnecessary tax returns and charge a fee. Sometimes a taxpayer himself might increase his tax liability by filing an unnecessary amendment that increases his tax liability. We will not do this.

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