What is an S-Corp?
S-Corporations (or S-Corps) are special types of corporations that, for federal tax purposes, choose to pass corporate income, losses, deductions, and credits through to their shareholders. The shareholders report the flow-through of income and losses on their personal federal tax returns and are taxed at their individual income tax rates. This allows S corps to avoid double taxation — the business is essentially not taxed.
Is my company an S-Corp?
To qualify for S Corp status, your company must meet a few requirements and submit a specific form (Form 2553) signed by all the company’s shareholders. Read more about the requirements to become an S-Corp here.
If my company is an S-Corp, what do I need to do?
Tell us! If your company is treated as an S-Corp for tax purposes, we’ll need you to confirm that status in writing and answer these questions:
- Do any shareholders have greater than 2% interest in the company?
- Do any of those shareholders have medical, dental, or vision premiums paid for by the company outside of Justworks? If so, we’ll need to know which shareholders had premiums paid for them and the amounts paid on their behalf.
If you haven’t already let us know, you can do so by reaching out to your Account Manager or firstname.lastname@example.org as soon as possible but no later than December 15, 2017 so that we can finalize your 2017 taxes.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.