Welcome to Just Answer! My name isXXXXX very much enjoy what I do and I hope that you will benefit from this information.
I am not a CA attorney. So, if you are not satisfied with my answer, please let me know and I will release the question back to the main board.
CA personal service corporations provide services in the fields of health, law, engineering, architecture, accounting, actuarial science, or consulting. These professional corporations are allowed to file for S Corporation status and this election allows for the entity to have pass-through tax treatment.
Thus, if the S corp election is made, the personal service S - Corp is not subject to the flat 35% income tax rate. With an S -Corp, the corporate profits and losses are passed through to the shareholder-employees who will pay ordinary personal income tax.
Under CA law, all corporations (including professional corporations) are initially filed and treated as C corps unless and until a S corp election is made. A California corporation that has elected S tax treatment by filing IRS Form 2553 is commonly referred to as an S - Corp.
If you need more clarification or follow up information, please feel free to write back as there is no extra charge. Otherwise, please click on the ACCEPT button. Even if you have put in your payment information, I receive no credit for my time unless you press "ACCEPT".
Sometimes the law does not give you the outcome that you may have anticipated. Please understand that this is not the attorney's fault. We are assuming that you are paying for an honest and professional opinion.
Please know that there may be a delay between your follow up question and my answers because I may be helping other customers in the meantime. Rest assured, I will get back to you.
If you feel that I went an extra step to help, a bonus would be greatly appreciated!
This information is provided so you may better discuss legal issues with your attorney. Consult a local attorney for legal advice before acting. You may be able to find an attorney in your area to further assist you at http://www.martindale.com/ or at http://www.lawyers.com/ .
You can always request me for a future question by starting your new question with "This question is for Maverick".
Thank you for the opportunity to assist you.