S-corp specialists for Indiana owners

When should an Indiana business elect S-corp status?

Roughly: when net profit (after a reasonable salary to the owner) exceeds about $40k–$50k. Below that, the S-corp tax savings don't cover the additional payroll and tax-prep costs. Above it, the savings compound — typically $3k–$15k+ per year of FICA savings on the distribution portion of owner compensation.

The election (Form 2553) must be filed within 2 months and 15 days of the start of the tax year you want it effective; late-election relief exists but is conditional. We handle the timing and filing.

How does Indiana tax S-corporations?

Indiana doesn't impose a separate S-corp income tax — income passes through to the shareholders' Indiana IT-40 returns. There's a $250 annual minimum corporate fee. S-corps with nonresident shareholders may file a composite return paying Indiana tax on their behalf. The 2026 Indiana flat tax rate is 2.9%, which affects pass-through math significantly.

What is reasonable salary and why is it the most-audited S-corp issue?

S-corp owners can take part of their compensation as salary (subject to FICA / Medicare) and part as distributions (not subject to FICA). The IRS audits this aggressively because too-low salary equals lost payroll tax. Reasonable salary must reflect what you'd pay someone else to do your job — documented with comparable-position data, hours, and duties.

We do a written reasonable-comp study annually with BLS data, the Bureau of Labor Statistics, and industry-specific surveys. The result is defensible documentation — not just a number we pick.

Can a single-member LLC be an S-corp?

Yes. The LLC is the legal entity; the S-corp is the tax election. We file Form 8832 (if needed) and Form 2553 simultaneously so a single-member LLC files as an S-corp federally and pass-through in Indiana. The LLC's operating agreement and Indiana INBiz registration don't change.