S-Corporation: Advantages, Disadvantages, and Payroll
When considering forming an S-Corporation, it is important to weigh the advantages, such as pass-through taxation and limited liability protection, against the disadvantages, like restrictions on ownership and eligibility requirements. Managing payroll for an S-Corporation involves ensuring compliance with tax laws and regulations, as well as accurately calculating and distributing employee wages. Today we look into the advantages, disadvantages, and payroll setup of an S-Corporation. What is an S-corp? An S-Corporation is a type of business entity that allows for pass-through taxation, meaning profits and losses are passed through to the shareholders to report on their individual tax returns. Additionally, an S-Corporation provides limited liability protection for its shareholders, protecting their personal assets from business debts and liabilities. Forming an S-Corp involves filing articles of incorporation with the state and electing S-Corp status with the IRS. This type of