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Creytix Tax is decision support for you and a licensed professional. It is not a CPA, enrolled agent, attorney, or tax-return preparer. Outputs are not legal, tax, or accounting advice. Do not file, elect, form, or pay from these pages without professional review.

Tax classification

S-corporation election

A federal tax election (Form 2553) available to eligible corporations and LLCs. It is not a type of company you form at the secretary of state.

Compare typesStructuring wizard
Legal vs tax
You still have an LLC or corporation under state law. S-corp status changes how income is taxed and usually requires reasonable officer compensation through payroll.
Liability
Unchanged by the election. Liability follows the state-law entity.
Default federal tax
s corporation
Other federal options
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Formation / maintenance
Eligibility tests, Form 2553 timing, payroll setup, and reasonable-compensation documentation — then ongoing 1120-S / K-1s.
Public-record notes
The election is a tax filing, not a public-record privacy tool.
Succession
Ineligible shareholders (including some trusts and any partnership) can blow the election.
Investor fit
Conflicts with most preferred-stock and fund structures. Eligibility is a hard gate, not a preference.

Disqualifiers

  • More than 100 shareholders
  • Ineligible shareholder (nonresident alien, partnership, corporation, ineligible trust)
  • More than one class of stock
  • Reasonable compensation treated as a percentage shortcut

Professional review: cpa, payroll, attorney.

Related: single-member-llcmulti-member-llcc-corporation

Eligibility and directional payroll-tax delta

Federal eligibility gate

Hard fails first. A pass is not permission to elect. Rule [email protected].

pass — Facts as entered do not trip the hard federal eligibility gates. This is not approval to elect. Reasonable compensation, timing of Form 2553, built-in gains, and QBI still require a CPA.

Payroll-tax delta (directional)

Self-employment tax on profit vs employer+employee FICA on a salary you type. Not total tax. Not QBI. OASDI wage base $184,500.00 (SSA 2026). Salary is an input — never a percent of profit.

SE tax (modeled)
$18,360.00
FICA on salary (EE+ER)
$12,240.00
Delta (SE minus FICA)
$6,120.00

warning: This compares self-employment tax on net profit versus combined employer+employee FICA on the proposed salary. It ignores federal income tax, QBI, additional Medicare, unemployment, workers' comp, and state tax. Reasonable compensation is professional judgment — not a percentage of profit.