Delaware recognizes the federal S election and does not require Delaware S corporations to pay income tax. However, it does require these businesses to the state’s franchise tax. In addition, an individual S corporation shareholder will owe tax to the state on his or her share of the company’s income.

How do I form an S Corp in Delaware?

How to Incorporate an S Corp. in Delaware

1. Choose a name.
2. Engage a registered agent.
3. Draft and file a certificate of incorporation.
4. Issue the corporation’s stock.
5. Complete the corporation’s initial documentation.
6. File Form 2553 with the IRS.

Can I fill LLC on Form 1120 s?

However, if a qualifying LLC elected to be an S Corporation, it should file a Form 1120S, Form 1120S, U.S. Income Tax Return for an S Corporation Instructions, U.S. Income Tax Return and S corporation laws apply to the LLC.

How do I file S corp and personal taxes?

File Form 1040 As an S corp shareholder, you pay income tax on two types of income — your salary and your portion of S corp earnings. You’ll often hear these referred to as W-2 and K-1 income, respectively. Both get reported on your personal tax return. Your W-2 income goes on line one of Form 1040.

Why use an S Corp in Delaware?

A Delaware S corporation is a business entity that can avoid federal income taxes by electing to be taxed under subchapter S of the Internal Revenue Code. This type of corporation is formed by creating a general corporation in Delaware and then filing IRS Form 2553 to select S corp tax treatment.

How much does it cost to start an S Corp in Delaware?

The state fee to incorporate in Delaware is a minimum of $89. This includes your Division of Corporation fees ($50), filing fee tax ($15 minimum), and the county fee ($24).

Do you have to register a corporation in Delaware?

The fee is based on the number of authorized shares within the corporation. If incorporated in another state but doing business in Delaware, you must still register with the Delaware Division of Corporations. Visit the Division of Corporations’ How To Form a New Business Entity for more information or contact:

What kind of tax form do I need to file in Delaware?

The State of Delaware only requires the filing of an annual withholding tax reconciliation form, Form W-3. Quarterly reconciliations are neither required nor accepted.

Can a small business form a LLC in Delaware?

Nathan was deceived into forming a Delaware LLC because he read it was a tax friendly state, and while this is true, it really only applies to large, multi-million dollar companies and not small business LLCs. Look, don’t just take our word for it. Read what the Delaware secretary of state has to say about the hype …

When do foreign corporations have to file a Delaware tax return?

Foreign Corporations. Foreign Corporations must file an Annual Report with the Delaware Secretary of State on or before June 30 each year. A $125.00 filing fee is required to be paid. If the Annual Report and remittance is not received by the due date, a $125.00 penalty will be added to filing fee.