Discussion:S Corp Election
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Discussion Forum Index --> Tax Questions --> S Corp Election
| 6 January 2007 | |
| Are CPAs, attorneys and other professionals prohibited from S status election? If not, how the PSC apply? Any help is appreciated.
Thanks | |
Death&Taxes (talk|edits) said: | 6 January 2007 |
| Any prohibition would have to come from state licensing standards, not the IRS. | |
| January 6, 2007 | |
| Not at the Fed level they're not, tho' some states do regulate this. | |
| 6 January 2007 | |
| That's one of the benefits of electing S, to avoid the PSC rules. | |
| 6 January 2007 | |
| LJACPA,
If I understand you correctly, I guess if one doesn't elect S status then automatically becomes taxed at the QPSC (for professionals as defined in the code of course) level. Please comment. | |
| January 6, 2007 | |
| Yes, the S election is just that, an election to be taxed as an S. Default is the C status, or PSC in this case... | |
| 7 January 2007 | |
| Thanks JR1. I've seen prof. firms filed and taxed as a regular C corp obviuosly incorectly... | |
| 8 January 2007 | |
| JR said it, you elect S and PSC or QPSC no longer applies. If you are saying that it is incorrect for professional firms to file and be taxed as C corporations, that's not exactly true. It may not be very smart, but it's not per se 'incorrect'. Professional firms can file as a C, but may be subject to flat 35% tax rate. | |
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