An S corporation is sometimes referred as a Small Business Corporation. The benefit is the Internal Revenue Service allows these corporations to pass their deduction and credits as well as corporate income to the shareholders.
In order to not pay corporate income taxes, many S corporations divide the income up with the shareholders at the end of the year. They then pay the taxes through their personal taxes. This avoids double taxing.
In order to start your S corporation, you first have to file your Articles of Incorporation with the state. Once you have done this, you can then logon to the Internal Revenue Service’s website to apply for your Employer Identification Number. You can select the S corporation designation but will have to fill out the Internal Revenue Service’s Form 2553 and send it to them within seventy-five days.
You do not necessarily have to incorporate in the state you intend to do business. Incorporating in Wyoming can save you money. Many people use a registered agent to help them muddle through the paperwork. Wyoming Discount Registered Agent, Inc. has been helping people incorporate in Wyoming for years. Their experience can make the process easier as they know the ins and outs of applying for a corporation. They will also give you a reminder when you need to renew your corporation.
Once you have incorporated in Wyoming, you will need to check with the state you intend to do business to see what type of license you need locally. They state may require you to submit a Certificate of Good Standing when you apply for your license with the state. In Wyoming it is very easy to get the Certificate of Good Standing by logging onto the Secretary of States website and looking up your corporation. There you can download the Certificate of Good Standing as a PDF or portable document format.
Keep in mind, you may need to get a business license not only in the state you are doing business in, you may need to get one in the county and the city you are doing business in.
This article is for informational purposes only. If you choose to incorporate, you should work with your lawyer and or your certified public accountant.