Tax Benefits of an S-Corporation

Headquartered in Draper, Utah, Prime Corporate Services (PCS) maintains a staff of experienced business consultants with expertise in corporate tax structures, corporate credit, and estate planning. Among other services, the consultants at Prime Corporate Services assist clients in determining the best way to structure their businesses for tax purposes. The S corporation is one business entity that offers several advantages.

Starting a business involves more than just identifying a market and creating a product. Smart business owners also consider the best way to structure their businesses for tax purposes. While sole proprietorship and LLC entities are robust enough for small or new businesses, once a company starts growing, the owner may want to look at more complicated corporate structures that offer additional benefits.

One of these structures is the S corporation, which offers many of the same benefits as an LLC, including pass-through taxation and shielding personal assets from business creditors. However, an S corporation has the added benefit of allowing the business owner to in an employee capacity. This means the owner can take salary and dividend payments and pay individual income tax only on that portion of the business’ revenue.

This arrangement offers two major tax benefits. First, dividend payments are not subject to self-employment tax like other business classifications. Second, the salary drawn by the business owner can be deducted from business revenue as a business expense. Both of these can lead to a lower overall tax bill for the business owner.

Prospective clients are encouraged to visit www.primecorporateservices.com/contact to learn more about PCS and its services.