S corps are corporations that have elected a special taxstatus with the IRS. S corporations provide the same limited liability to
owners (called shareholders) as C corporations, meaning that owners
typically are not personally responsible for business debt and liabilities;
however, S corporations have pass-through taxation. S corps do not pay tax at
the business level, they file an informational tax return but business income/loss
is reported on the owners’ personal tax returns, and any tax due is paid at the
individual level.
Forming an S corporation has many advantages. Many small business owners form a corporation and elect S corp status for pass-through taxation.
