An S corporation is essentially a regular corporation that has applied for “S corporation” tax status. S corp shareholders report pass-through income on their personal income tax returns. By reporting income here, S corporation shareholders avoid doub

In order to become an S corporation, the corporation must submit Form 2553 Election by a Small Business Corporation signed by all the shareholders. See the Instructions for Form 2553 PDF for all required information and to determine where to file the form

A regular C corporation is taxed twice—one tax at the corporate level on the corporation’s net income, and then a second tax when profits are distributed to shareholders. You can avoid this double taxation by electing to become an S corporation.