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Form 2553, Election by a Small Business Corporation, can't be filed electronically. The form instructions state that the corporation needs to mail or fax the original copy of the form to the IRS. Refer to the IRS Instructions for Form 2553 for more information.

S corp tax status is an attractive choice because it offers liability protection and tax savings while making it easier to transfer business interests. This federal status allows S corporation shareholders to avoid double taxation on any corporate income.

While every business owner should decide which business structure is right for them based on their business needs and business plan, for most small businesses just starting, it is better to choose an LLC instead of an S corporation.

LLCs and S corps have much in common: Limited liability protection. The owners of LLCs and S corporations are not personally responsible for business debts and liabilities. Instead, the LLC or the S corp, as the owner of the business, is responsible for its debts and liabilities.

You need to earn at least $40,000 in profit for an S Corp to make sense, though. Otherwise, the costs of forming and running it exceeds its benefits. Of course, the details depend on a variety of factors, including: Salary amount: the owner of an S-Corp can take a salary from the profits.

An S corporation may have some potential disadvantages, including: Formation and ongoing expenses. Tax qualification obligations. Calendar year. Stock ownership restrictions. Closer IRS scrutiny. Less flexibility in allocating income and loss. Taxable fringe benefits.

In California, a corporation must authorize at least one share but may authorize any number.

(A 2-percent shareholder is someone who owns more than 2 percent of the outstanding stock of the corporation or stock possessing more than 2 percent of the total combined voting power of all stock of the corporation.)

Yes, it is possible to establish an S-corp as a one-person business. While traditionally S corporations are formed with multiple shareholders, the IRS allows a single individual to set up an S corporation. As an individual, you can be the sole shareholder, director, and employee of the S-corp.