"S" Corporations

1. Avoid double tax by electing "S" status as your profits are taxed only once on your personal income tax returns.

2. Avoid payroll taxes on the corporations profit, as the "S" Corporate profit is deemed "unearned" income, and thus is not subject to any employment taxes.

3. Benefits on your personal income tax return from "S" Corporate losses, assuming the losses are not deemed "passive" losses.

4. Keep owners' salaries low to minimize payroll taxes, but be sure to pay the owner stockholders a reasonable wage for services. All "S" stockholders want to minimize their payroll costs and are tempted to pay themselves little or no salary for the purpose of reducing social security taxes and other payroll taxes.