Reflection of the Week

Should I Make an S-Election

Hey all!

Happy Friday.

Tax season is in full swing, and my most frequently asked question from my business owners is, “Should I become an S-Corp?”

With the S-Election deadline about two weeks away, I figured it’s a good time to revisit this question. Many small business owners think or have been told that the S-Corp election is the way to reduce taxes for your business because it allows you to save on self-employment tax. While accurate, blanket advice like that doesn’t always make sense. Whether to elect this status for your business as an S-Corp or not is a technical question with broad implications.

Because of the complexity associated with this decision, I split up this discussion into two different parts. You can find Part 1 here and Part 2 here.

I’ve also done a deep dive into the 1120S return here.

I hope this helps with your S-Corp dilemmas.

 

Questions of the Week

• How is your business structured?
• When was the last time you revisited this structure?
• Is it time to change?

 

Tool of the Week

If you feel like the S-corp is the way to go for you, here is Form 2553 to make the election and the instructions