If you’re one of the 2.4 million business owners who operate as a one-shareholder S corporation, you likely do so to save on Social Security and Medicare taxes.1

The S corporation has another nifty advantage most people don’t know about: it can form a subsidiary corporation and elect to have it treated as a qualified subchapter S subsidiary—also known as a QSub.

Disregarded

A QSub is disregarded for federal income tax purposes.

As far as the IRS is concerned, the parent S corporation and the QSub are a single taxpayer; the QSub’s assets, liabilities, income, deductions, and credits are all treated ... Log in to view full article.