Let's establish some facts and terms first.
1.) An S-Corp is not actually a separate business entity that is created.
2.) Being an S-Corp means that you are already a business entity of some type and you file IRS Form 2553 with which you make an Election to be treated for tax purposes as a Subchapter S Corporation.
3.) The primary feature of S Corporation status is that the income of the entity will drop through to the shareholders and not be taxed at the entity level, and it will not be treated as self-employment income.
4.) An LLC can be created, it can choose to be taxed as a corporation, then it can file Form 2553 to be treated as an S Corp for tax purposes, and it will refer to itself as either an LLC or an S Corp. But it is actually an LLC that has elected S Corp tax treatment.
5.) A regular corporation, called a C Corporation can be created and Form 2553 can be filed, and the entity will be referred to as an S Corp.
6.) So, traditionally, "S Corp" means a C Corp that has elected Subchapter S tax treatment, and does not mean an LLC that has elected Subchapter S tax treatment.
7.) Lately, however, the two terms have been used interchangeably, and this is causing confusion when it comes to asking question, and even more confusion when the questions are answered.
Sorry if I rambled a bit, but we need to be as specific as possible and we will get better exchange of information.
I hope this helps someone.
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