An S Corporation is a business entity that elects a special tax status with the IRS, allowing profits and losses to pass through to shareholders’ personal tax returns, impacting payroll.
- What is an S Corporation?
Answer: It is a business with a tax status passing profits to shareholders’ returns. - What are the benefits?
Answer: It avoids double taxation and offers liability protection. - What are the limitations?
Answer: It is limited to 100 shareholders and one class of stock. - How does it affect payroll?
Answer: Shareholders must pay themselves reasonable salaries. - What role does HR play?
Answer: HR ensures compliance with salary and tax requirements.
