S Corporations Unlike a traditional corporation, an S corporation generally is not subject to separate federal income tax. Arizona recognizes the federal S election, and—in most cases—Arizona S corporations are not required to pay corporate income tax to the state.
How do I become an S Corp in Arizona?
How to Set Up an S Corp in Arizona
- Choose and reserve your business name.
- Appoint a registered agent (referred to as a statutory agent in Arizona)
- Appoint initial directors.
- Prepare your corporate bylaws.
- Draft and file your Articles of Incorporation.
- Issue stock certificates to shareholders.
Does AZ have a corporate income tax?
Arizona’s applicable corporate income tax rate is currently 4.9% of taxable income or $50, whichever is greater (A.R.S. §43-1111).
How is a S corporation taxed in Arizona?
Taxation Arizona S corporations are normally audited less frequently than sole proprietorships and partnerships. Arizona S corporations enjoy pass-through taxation so shareholders avoid so-called “double taxation.” Arizona S corporations file informational tax returns, but pays no income tax itself.
What are the costs of forming a S corporation?
S corporation excise taxes and state fees: The costs to maintain and form the S corporation will need to be paid. This includes an annual filing fee, possible excise taxes, and/or franchise taxes. Additional tax return preparation costs: A tax accountant will need to be hired in order to file the state and federal tax returns.
Do you have to pay taxes as a s-Corp?
By paying out salaries, you are a known subject to FICA and payroll, and therefore liable for additional taxation. The additional tax you’ll incur as an S-Corp is 15.3% of anything that you pay out. As a trader, there is no need to pay a salary.
How do you become a corporation in Arizona?
Official documents must be filed with the state in order to form a Arizona corporation, and state filing fees must be paid. Form 2553 electing special tax status must be filed with the IRS.
