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New York City does not recognize Federal or New York State "S Corporation" elections. S Corporations are subject to this tax. A taxable association or publicly traded partnership is treated as a corporation for the purpose of this tax.

For this reason, an S corporation is called a pass-through entity. This happens in most states, with the exception of New York State and New York City. New York City doesn't recognize the concept of S corporation.

Choose a corporate name. File your Articles of Incorporation. Appoint a registered agent. Start a corporate records book. Prepare corporate bylaws. Appoint initial directors. Hold first Board of Directors meeting. Issue stock to shareholders.

An S corporation, for United States federal income tax, is a closely held corporation (or, in some cases, a limited liability company (LLC) or a partnership) that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code.

A C corp is what you have if you do not elect S corp status with the IRS. ... Owners of a corporation who work in the business, typically in executive positions, are considered employees. They must be paid a reasonable salary and are also taxed on this personal income. An S corporation does not pay dividends to its owners.

To elect Corporation status, the LLC must file IRS Form 8832 - Entity Classification Election. To elect S Corporation status, the LLC must file IRS Form 2553 - Election by a Small Business Corporation.

So, by default, a single-member LLC is taxed as a sole proprietorship while a multimember LLC is considered a partnership. The key phrase is by default, because an LLC can choose to be taxed as an S-corp or C-corp. ... But, the owner will only pay taxes on their own salary (not on Social Security or Medicare).

So, by default, a single-member LLC is taxed as a sole proprietorship while a multimember LLC is considered a partnership. The key phrase is by default, because an LLC can choose to be taxed as an S-corp or C-corp. If an LLC selects an S-corp designation, it may save money on Social Security taxes and Medicare.

S corporation advantages include: Protected assets. An S corporation protects the personal assets of its shareholders. Absent an express personal guarantee, a shareholder does not have personal liability for the business debts and liabilities of the corporation.

The biggest difference between C and S corporations is taxes. A C corporation pays tax on its income, plus you pay tax on whatever income you receive as an owner or employee. An S corporation doesn't pay tax. Instead, you and the other owners report the company revenue as personal income.

In New York City, for example, the General Corporation Tax is imposed on all corporations at a rate of 8.85%. NYC does not recognize federal or New York State S corporation elections, and so S corporations are subject to the General Corporation Tax.

Entire net income base 8.85 percent of entire net income. Total capital base 0.15 percent of business and investment capital. There are numerous variables to consider with this method.

Corporate rates, which most often are flat regardless of the amount of income, generally range from roughly 4% to 10%.

Minimum Taxable Income Currently, the MTI tax rate for New York corporations is 1.5 percent, however, certain New York manufacturers may qualify for a reduced tax rate is 0.75 percent.

File Your Federal Tax Return If you're business is an S corporation, you'll file Form 1120S, a tax return that shows your corporation's income, expenses and losses. You'll also file a Form K-1 for each of your corporation's shareholders, showing their share of the corporation's income, deductions and credits.