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Filing Taxes As An S-Corp for Your Contracting Business

Filing taxes as an S-Corp can be a time-consuming and complex process, but having a good understanding of the filing requirements and deadlines can help to make it more manageable. An S-corp is a type of corporation that elects to pass S-Corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. This article will provide an overview of filing taxes as an S-corp, including the different benefits it can offer, important dates to remember, and how-to information.

What is an S-Corp?

An S corporation is a type of business entity that chooses to have its income, deductions, and credits passed through to its individual shareholders for taxation purposes at the individual rate rather than businesses being taxed at corporate rates at the entity level. The advantage of this structure is that owners are only subject to one layer of taxation on profits since they pay taxes once on their personal returns instead of twice – first at the corporate level and then when profits are distributed from the corporation.

Benefits of Filing Taxes as an S-Corp

Businesses that choose to file taxes as an S-corporation may be able to take advantage of several potential tax benefits such as lower self-employment taxes and deductions or credits not available in other entities. Additionally, if there are multiple owners or shareholders involved in a company then filing taxes as an S-Corp may also help them protect themselves from personal liability in case anything goes wrong with the business itself. 

Finally, filing taxes as an S-Corp may help save money on accounting fees since owners don’t have to go through the process of filing separate corporate and personal tax returns each year.

Deadlines for Filing Taxes as an S-Corp

According to IRS rules, all S corporations must file their annual tax return by the 15th day of the third month after their fiscal year end (generally March 15th). However, if there are more than one owner or shareholder then additional forms such Form 1120S: U.S Income Tax Return for s Corporation or Form 2553: Election by a Small Business Corporation might need filling out first before any other forms can be filed in order for your election to be valid. Therefore, it’s imperative that companies plan ahead so that all documents are filed accurately and on time – failing which could result in penalties or fines being imposed upon them.

How To File Taxes As An S Corp

In order for businesses wanting to file taxes as an S-Corp they must begin by completing Form 2553: Election by a Small Business Corporation which must be submitted within two months and fifteen days after starting operations or before any other form has been filed with IRS if they wish for their election to become valid. After this form has been conducted they must then make sure they submit Form 1120S: U.S Income Tax Return each year alongside any associated documents like Schedule K1 which states each shareholder’s share of income or loss from activities reported on form 1120S. Every shareholder should also fill out form 1040 annually so that any profit or loss from shareholding may properly be reported.

Work with a Tax Expert

It’s easy to see how complicated filing taxes can be especially when opting for filing taxes as an S corp – fortunately, remembering key dates relating to submitting paperwork, taking advantages offered via this way of taxation and protecting yourself against possible liabilities can make running your business smoother while possibly giving you better savings come time tax time! If you have any questions about filing your business taxes, be sure to contact a local tax expert. If you don’t currently work with a tax professional, simply jump on Google and search for business tax preparer near me where you’ll find a variety of reviews from other businesses in your area. 


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