What is the tax liability for an S-Corp?

An S Corporation (S-Corp) is a corporation that makes a special election with the IRS to be taxed as a pass-through entity. This means the S-Corp generally does not pay federal income tax at the corporate level. Instead, the corporation’s profits, losses, deductions, and credits pass through to its shareholders, and each shareholder receives a Schedule K-1 showing their share of these tax items to report on their individual tax return.