Who Form 1120 C Compensation 2023-2024

Here is the corrected and divided text: So, that is why most smaller corporations that qualify for what they called S corporation status or subchapter S corporation status make the actual subchapter S election. There are some rules they all must be US persons. The owners can have more than a hundred owners, so a public corporation can never be an S corporation. Because in essence, they're gonna have they could have any sort of owners. However, smaller corporations, in which all the owners are US persons and US taxpaying persons and doesn't have any more than a hundred shareholders, then they could be an S corporation. The advantages of the S corporation are taxation at the shareholder level. So, the S corporations don't pay tax on unto themselves. An S corp files a tax return, but doesn't pay tax. The net profit or the taxable income is distributed to each shareholder. Now, it doesn't have to be an actual physical cash distribution. We'll talk about actual cash distributions later on. We're talking about just the figure of taxable income, whether the money is still in the business corporate accounts or it gets transferred to the owners' pockets. It does that. That's that. That's what we're talking about here, just the figure of the taxable income gets distributed through a document based on the percentage ownership. Each shareholder will pay taxes based on their own tax bracket. The S corporation won't pay the tax, but each owner will pay the taxes of the S corporation based on the percentage because they got distributed again, not a physical cash distribution, just a paper distribution of that profit. So, each owner pays their own tax. This gets distributed in a form called a k1. So, the corporate tax preparer prepares the corporation tax returns and...