3 Tax Advantages of S Corps over C Corps.
Generally, S Corps offer more tax advantages to small business owners than C Corps.
Pass-through tax treatment.S Corps are not technically partnership, hence, they are addressed in a different part of the tax code. However, they are specifically, designed to receive partnership tax treatment, and thus, receive pass-through tax treatment. This is in sharp contrast with C Corp being taxed at the entity corporate taxable income, as well as, at the individual level, when their shareholders receive dividends and/or wages (if they are shareholder employees).
Potentially, less tax audit risk.S Corps are often processed and audited, by a different group of IRS employees. The IRS generally targets C Corps more, in regard of tax audit and tax compliance perspective, because they tend to be larger businesses than S Corps.
Individual owners can deduct lossesUnlike C Corp shareholders who can not receive a tax loss offset (at least contemporaneously), if the business has a bad year; S Corp shareholders can be passed through S Corp losses oftentimes.