Video: S Corporation

In this lesson, join Nick Palazzolo, CPA, as he clarifies the intricacies of S-Corporations, beginning with their structure and identifying the unique combination of legal and tax benefits that they offer. He walks through the process of how to form an S-Corporation and highlights how they differ from C-Corporations, especially regarding liability protection and tax implications. Nick delves into the concept of flow-through taxation, explaining how profits and losses are handled at the shareholder level to avoid double taxation. He also covers shareholder bases, emphasizing the fact that they can't fall below zero, which is a critical piece of knowledge for exam-takers. Viewers can expect to learn about the management and ownership transfer rules unique to S-Corporations, including strict limitations on shareholder eligibility. Nick leverages tax forms to demonstrate how business income translates into personal tax obligations, illustrating the path income takes through various schedules and forms, such as the Form 1120-S and Schedule K-1, culminating on the individual's 1040. This detailed walkthrough is designed to provide clear visualization for understanding S-Corporation tax reporting, bolstering preparation for related exam questions.