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Also http://biztaxtalk.com/node/1576 http://biztaxtalk.com/node/1576

• tptacek 16y ago
  The main advantage of forming an S-Corp should be that it allows you to have a formalized corporate structure with shareholders (including employees with bona fide ISOs or restricted stock) without incurring the rather large overhead of maintaining a C-Corp. An S-Corp should simply be the corporate version of an LLC. It doesn't seem to me that the intent of the S-Corp structure was to allow a small number of people at the top of the company to exempt half their income from taxes that virtually everyone else in the country has to pay.
  • sfbrando 16y ago
    I don't think you know what you are talking about. I am a CPA and there isn't any larger overhead expenses for one owner C-Corps vs. S-Corps. The main difference is that owners/employees of C-Corps usually just take money out by way of wages only. If they also take dividends they have to pay income tax on the dividends on their personal return, but get no deduction on their corporate income tax return. Thus "double taxation" is the result. S-Corps make it simpler to take distributions and make more sense and are more fair and equitable. Most S-Corps take money out in wages and shareholder distributions. The wages need to be reasonable and the shareholder distributions are a distribution of profit of which you pay income tax on, but there is no double taxation since the income flows through to your personal tax return anyway. I don't know what you mean about small number of people at the top of the company get to exempt half their income from taxes that virtually everyone else in the country has to pay. Our income is not exempt in any way. You might want to know your facts before spouting off stuff you don't know.