Introduction to S Corporations: Eligibility and Election [CPA Prep]

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🎓 Lesson Overview:
In this lesson, Nick Palazzolo, CPA, breaks down the ins and outs of S Corporations, highlighting their role as a favored business structure that marries limited liability with pass-through taxation. Delving into the historical roots established under the 1958 subchapter S of the Internal Revenue Code, Nick sheds light on the original intent to bolster small business growth by avoiding the double taxation seen in C Corporations. He unpacks the criteria and process that qualify a business as an S Corporation, emphasizing that this status is tailored for smaller, closely held companies rather than large, public ones. By comparing the characteristics and advantages of S Corporations with those of LLCs, Nick clarifies the decision-making process behind choosing an appropriate business entity and underscores the importance of corporate formalities and the potential for self-employment tax savings. Through a blend of practical advice and specific examples, Nick ensures a thorough grasp of what sets S Corporations apart.
🔍 Key Topics Covered:
- S Corporation Basics
- S Corp Eligibility
- S Corporation Election
- Pass-through Taxation
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