S Corporation Taxation: Formation, Compliance, and Planning

Categories: Federal Tax, IRS CE
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About Course

This self-study course provides a practical overview of S corporation taxation, including entity formation, eligibility requirements, shareholder compensation, tax reporting, and ongoing compliance responsibilities. Participants will learn how S corporations differ from other business entities, how income flows through to shareholders, how to determine reasonable compensation, and how to properly report activity on Form 1120-S and Schedule K-1. The course also covers shareholder basis, distributions, common IRS audit issues, and compliance best practices for maintaining S corporation status.

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What Will You Learn?

  • Understand S corporation formation, eligibility, and election requirements
  • Apply shareholder reasonable compensation rules and payroll tax concepts
  • Prepare and interpret Form 1120-S and Schedule K-1 reporting items
  • Calculate shareholder basis, distributions, and pass-through income treatment
  • Identify common S corporation compliance mistakes and IRS audit risks
  • Understand filing deadlines, penalties, and ongoing compliance responsibilities

Course Content

Module 1 – S Corporations: Formation and Eligibility
Learn the rules governing S corporation formation, eligibility requirements, Form 2553 elections, shareholder limitations, one-class-of-stock requirements, election termination rules, and common issues that affect S corporation status.

  • S Corporations: Formation and Eligibility

Module 2 – Shareholder Compensation and Distributions
Explore reasonable compensation requirements, payroll tax obligations, salary versus distribution planning, shareholder basis considerations, IRS enforcement initiatives, and common compensation-related audit risks.

Module 3 – S Corporation Tax Reporting (Form 1120-S and Schedule K-1)
Understand Form 1120-S preparation, Schedule K-1 reporting, pass-through taxation, shareholder basis calculations, phantom income issues, separately stated items, and common tax reporting challenges.

Module 4 – Compliance Requirements and Common Issues
Learn annual compliance requirements, payroll and filing deadlines, corporate formalities, state compliance obligations, common S corporation mistakes, audit triggers, and basic exit planning strategies.

Final Assessment – S Corporation Taxation: Formation, Compliance, and Planning
This final examination assesses the participant’s understanding of S corporation formation, shareholder compensation, Form 1120-S reporting, Schedule K-1 issues, basis rules, and compliance requirements.

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