How C Corporations can Legally Convert to S Corporations Avoiding the "Double Taxation" Effect of C Corporations

How C Corporations can Legally Convert to S Corporations Avoiding the "Double Taxation" Effect of C Corporations

If you think your taxes are bad enough, they can be worse. If your business is an C Corporation there may be substantive relief on the horizon. C Corporations can legally convert to S Corporation status saving thousands annually. C Corporations are taxed first at the corporate level and then again at the shareholder level as these monies are paid out to the owners. For Atlanta's Business Owners this is a "double whammy" they can avoid by filing Form 2553, Election to be a Small Business Corporation.

Though all client situations are different, a CPA's responsibility at every client is varied, but their goal for each client should be the same, to save you much more and to contribute more than their fees. Frequently by assisting in the process of Helping C Corporations Owners save thousands annually by avoiding the double taxation associated with C Corporations and Converting them to S Corporations. Also frequently with new clients an evaluation and critique of prior filed returns can frequently result in amending those prior returns to gain substantive refunds. For example of the clients we assisted in this process saved $16,000 by converting their S Corporation to an S Corporation while a review of their prior returns resulted in determining that their prior taxes were done in error. This return was amended resulting in a $12,000 refund.

If you wish to convert either your C Corporation or LLC to an S Corporation the rules of being an S Corporation are fairly straight forward and many businesses will qualify. To be an S Corporation you must have:
• Have a December 31st year-end.
• Have less than 100 shareholders.
• Shareholders have to be U.S. citizens or resident aliens.
• Only one class of stock.
Although most states recognize and reflect the same tax treatment for S Corporations as the IRS and charge a relatively insignificant net worth tax such as Georgia, there are many states which charge a franchise tax as well. To read more about S Corporations and other entity types visit http://www.hiscpa.com/article2.html

CPA - "Never Underestimate the Value"

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/  (An Atlanta CPA firm) and for his latest book Overcoming Life's 9/11's: Job's Journey and to learn about his ministry visit http://www.john-dillard.com//