How do I make my corporation an S-corp?
To be treated as a subchapter S corporation, an election must be made on Form 2553. This election must be made within two months and 15 days into the tax year it will be elected in, meaning it is important to file this form immediately after creating your corporation if you wish it to be classified as an S-corp. If you have formed your corporation already and not filed the S-corp election in time there may be relief available to you, contact your tax advisor to see if the exceptions available may apply in your case.
Do I need to have payroll just for myself?
It is important to set up payroll for S-corps and pay a portion of the income as wages for personal services to shareholders if they do work in the business, so that the IRS does not come in at a later date and determine dividends as being self-employment earnings. C-corps can operate without paying the founders at all, so payroll is less important with them.
What other advantages do C-corps have?
C-corps have more credits and fringe benefits they can be used for, however it is important to carefully structure expense spending documenting business purposes and stay within the legal boundaries.
Will my corporation need a balance sheet?
One important thing to note is that balance sheets are not required for either partnerships or corporations with gross income under $250,000 and assets under $250,000 for corporations. This amount is $1,000,000 for partnerships, one of the reasons why it is preferable to own real estate in an LLC and/or trust structure rather than a corporation.