Starting an S-Corporation in Hawaii? Forming an S Corporation can help small business owners create large savings especially with self-employment taxes. Honolulu S-Corporation Tax Advisory Firm Diamond Head Tax Group OAHU will help Hawaii business owners choose the right type of corporate structure to suit their needs and reduce their yearly tax bill.
Diamond Head Tax Group OAHU are experts in helping small and midsize enterprises (SMEs) with Hawaii S Corporation Income Tax Return preparation in and around Honolulu, Aiea, Lāʻie, and Kailua. Let us handle the paperwork involved in forming S Corps with the IRS and Hawaii state offices, allowing Honolulu small business owners focus on running their enterprises.
Save Big by Forming S Corporations in Hawaii with 96816 Honolulu S-Corporation Tax Advisory Firm Diamond Head Tax Group OAHU Serving Honolulu, Aiea, Lāʻie, and Kailua
OAHU Small Business Owners can form S Corporations in order to create large savings especially with self employment taxes. S Corporation Shareholders might also pay less in "additional Medicare" taxes and enjoy a lower historic rate of examinations or audits.
An S Corporation is a corporation or LLC that elects the Federal tax classification with the IRS.
S Corp status does not affect the business structure, whether a corporation or LLC.
Eligible corporations and LLCs can elect S Corp status by filing IRS Form 2553.
Even though the terms “C corporation” and “S corporation” sound mutually exclusive, a C Corporation is a business structure while an S Corporation is a tax status, a special designation issued by the IRS. When a business has S Corp status it is referred to as an S Corporation by the IRS and the Hawaii Department of Taxation as well as other relevant offices.
Honolulu corporations or limited liability companies (LLC) can become S Corporations but sole proprietorships cannot be S Corps. They must first become a C Corp or LLC.
The IRS sets the specific requirements that business entities must meet to receive S Corp status. They must file Form 2553, an S Corporation election, to the IRS.
Hawaii S Corporations must file Form N-35, the Hawaii S Corp Income Tax Return, which calculates state corporate income tax. This income tax is usually “passed through” to the S Corporation shareholders.
On the other hand normal state taxes required for doing business in Hawaii apply to S Corporations like any other business.
Hawaii General Excise Tax
The Hawaii Department of Taxation charges a General Excise Tax or GET, which is similar to a franchise tax, on the gross income of every Hawaii business. Hawaii S Corporations must register for a GET license and file a yearly tax return. Some Hawaii cities and counties such as Honolulu and Hawaii charge additional GET taxes. These taxes are in place of sales tax.
Pass Through Taxation
Similar to LLCs or limited liability companies, S Corporations receive “pass-through” tax treatment for income tax applying at the state and Federal level in Hawaii. This means income from S Corp activities passes to shareholders’ individual income tax returns so instead of corporate income tax, they pay self-employment tax on their earnings.
Honolulu S Corporation Distributions
S Corporations have a major tax difference from Hawaii LLCs: members of an LLC owe self-employment tax on the entirety of their income from their small business but S Corp shareholders can take further distributions that aren’t classified as employment income.
S Corp shareholders can only take these distributions after receiving “reasonable” compensation for their work for the company.
Meet the Requirements for Forming Honolulu S Corporations
To know if your business qualifies to be an S corporation, the IRS only grants S Corp status to business entities that meet the following requirements:
Located in the United States
Have only 100 or fewer shareholders
Own only one class of stock
For reference:
Certain financial institutions such as insurance companies, and domestic international sales corporations are ineligible for S Corp status. Partnerships, corporations, and non-resident foreign nationals cannot be S Corporation shareholders.
Not sure if you meet these requirements? Let Honolulu S Corporation Tax Advisory Firm Diamond Head Tax Group OAHU make sure you qualify for S Corporation application before sending in the form.
96701 Aiea, Oahu
The Aiea area is nestled between Pearl Harbor and the breathtaking Ko’olau Mountain Range. Bustling with activities and offer prime city living with a diverse mixture of Hawai’ian culture. The Aiea area has a long, rich history of pearl trading, cattle raising, sugar production and now, industry and tourism.
Set on lush land in the central region of Oahu, this area is situated on a series of ahupua’a, or ridges and valleys stretching from the mountains to the sea that offer picturesque hiking trails for nature enthusiasts. 96701 Aiea small business owners can form S Corporations to reduce taxes with the services of S Corporation Tax Advisory Firm Diamond Head Tax Group OAHU.
96762 Lāʻie, Oahu
Lāʻie is a small town on Oahu's northeastern shore, between Hau'ula and Kahuku, its cultural attractions include the Mormon Temple, the Hawaii campus of Brigham Young University and the Polynesian Cultural Center.
The temple is the fifth oldest Mormon temple in the world. And the Polynesian Cultural Center is Hawaii's number one paid visitor attraction. It's a large open-air museum and park featuring the cultures of seven Polynesian island nations. Form S Corporations so your business can reduce tax expenses with 96762 Lāʻie S Corporation Tax Advisory Firm Diamond Head Tax Group OAHU.
96734 Kailua, Oahu
Kailua is located on the east coast of OAHU island in Hawaii with long stretches of sand on Kailua Bay and gentle waves making it a favorite destination with a cozy residential community. Kailua means "two seas" or "two currents," it is named after either the two lagoons located on the island or the two currents that run through Kailua and make it an ideal spot for windsurfing, kayaking and other water sports.
The sights and scenes of Kailua include Kailua Beach Park, a water sports hub; and Kalama Beach Park, with its gentle waves. Scenic Lanikai Beach overlooks the tiny, bird-rich Mokulua Islands. Over the beach, the Lanikai Pillbox Hike or Ka’iwa Ridge Trail leads to old military bunkers. S-Corporation Tax Advisory Firm Diamond Head Tax Group OAHU serves 96734 Kailua small business owners who want to form S Corporations.
96816 Honolulu, Oahu
Located on the south shore of Oahu, Honolulu is the capital of Hawaii and the gateway of the island chain. In this cosmopolitan capital city, visitors and locals will find everything from historic landmarks to fine dining to world-class shopping. 96816 Honolulu small business owners can form S Corprations with the assistance of Diamond Head Tax Group OAHU Honolulu S-Corporation Tax Advisory Firm.
Honolulu is Hawaii's main gateway to the world. It is also a major hub for business, finance, hospitality, and security in both the state and Oceania. The city is characterized by a mix of various Asian, Western, and Pacific cultures, reflected in its diverse demography, cuisine, and traditions.
Why Choose DIAMOND HEAD TAX GROUP CPA Services HONOLULU?
As Honolulu continues to expand, we continue to be the trusted local Oahu CPA firm. We are Located in the heart of Honolulu, and are focused on delivering professional and quality CPA Services to the small businesses and residents in Honolulu, Oahu.
We are proud to offer our tax and accounting firm services that help with the financial and business needs of our clients. Whether those needs are personal or business, we are here to provide you the financial guidance you seek.
When you partner with Diamond Head Tax Group, you’ll receive rates that are competitive and reasonable, flexibility that works around your schedule, and excellent client services.
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