Estimated tax tip savings. The S corporation is a beloved business structure because it saves business owners thousands of dollars each year in employment taxes. In one example, a business with $100,000 of net income saved $7,590 each year in employment taxes. Your tax savings will depend on your income and the nature of your business.
Oops! If you missed the regular deadline for converting your business to an S corporation, there’s a way to turn back the clock. Or maybe you didn’t convert because you don’t understand all the tax advantages of an S corp.
Let’s clarify both of those issues for you. First, the law normally gives business owners an extremely narrow window to make an S corporation election, depending on your tax year. So if you don’t file your election at the right time, you cannot begin operating your business as an S corporation until the following tax year.
Second, you’ll want to consider the S corporation form because it can spare you thousands of dollars in employment taxes every year.
Here’s the best news: even if you missed your S-corp. filing deadline by a few years, there’s a way you can file late and still get the IRS to grant your business all the juicy tax benefits!
So don’t lose any sleep over forgotten forms. As long as you follow some simple but little-known IRS requirements, you can treat all of last year ... Log in to view full article.