More & more, I see tax pro’s marketing the S-Corp election for massive tax savings but just like anything else, it’s important to do your homework before letting someone convince you that their way is the right way. It’s not a one-size fits all, and in this article I’m going to share some of the drawbacks (dirty secrets) about S-Corps plus what you can expect to pay for various services associated with electing S-Corp status.
An S-Corporation, or S-Corp, is a selected business structure, that one would choose at the time of forming their company. Choosing this structure allows pass-through taxation, meaning that profits and losses pass through to shareholders' personal tax returns, avoiding double taxation (i.e. the business being taxed AND you personally being taxed the income you pay yourself from the business).
On the other hand, the S-Corp...