Tax Law Insights

Corporations, limited liability companies, and certain other business entities can make an election with the Internal Revenue Service to be taxed under Subchapter S of the Internal Revenue Code.  If such an election is made, the business entity becomes an “S corporation” for federal income tax purposes, and also under the tax laws of many states.  The S corporation must file an annual tax return with the Internal Revenue Service (Form 1120S), and an annual state income tax return with those states that recognize S corporations.  The S corporation does not pay income tax, and its ...