Small Business in the USA: An S-Corporation Is not Always Best

It is generally believed that small companies should incorporate as S-corporations. While an S-corporation enjoys many corporate attributes (the main is that the owners of a corporation dо not expose their personal assets to corporate liability), it is treated like a partnership for purposes of determining its Federal income tax liability. At the end of each fiscal year, its total earnings (от losses) are prorated to each shareholder, and these earnings (oт losses) are incorporated into their individual income tax returns.