S corp tax calculator

How are S corps taxed?

S corps don’t pay federal corporate income taxes, so there is not really an “S corp tax rate” (although they may get taxed at the state level).

Instead, the company’s individual shareholders split up the income (or losses) amongst each other and report it on their own personal tax returns.

Unlike regular corporations (“C corporations”), this lets S corps avoid double taxation.

Double taxation refers to how income earned by a regular corporation is technically taxed twice: once when the corporation earns income, and again when it distributes dividends to its owners (who then pay taxes on those dividends).

S corps avoid this business tax by passing their income through to their business owners directly as reported on a Schedule K-1 (this is why they’re sometimes referred to as “pass-through” entities).

How do I elect S corp tax status?

To file (or ‘elect’) for S corp status, your business must first be incorporated as a regular C corporation or have filed for LLC status.

(Remember: S corp statu

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