Know what an S-Corporation is:

An S-Corporation is basically just a regular corporation that has elected for a different tax treatment. Regular corporations get taxed separate from their shareholders. Basically, a corporation makes income than get taxed on that profit. After that profit has been taxed, the net profit after taxes gets distributed to its shareholders. Than the shareholders gets taxed again on that same profit on their individual tax returns. This structure results in the same profit getting taxed twice. This is otherwise known as double taxation.

If you elect for S-Corporation status, you are asking that your corporation does not get treated as a separate entity for tax purposes. Instead, you are electing that your corporation's income passes through to the shareholders and only get taxed once on their individual tax return.

Meet the requirements to qualify for S-Corporation status:

To qualify to elect for an S-Corporation you must meet the following requirements:

1) You cannot have more than 100 shareholders. However, a husband and wife can count as just one shareholder.
2) A shareholder must be an individual, estate, or certain trusts.
3) The corporation must me located in any state in America.
4) Shareholders must be American residents.
5) Every single shareholder must agree on the corporation having a S-Corporation structure.
6) The corporation must only have one class of stock
7) The corporation must not be an ineligible corporation like certain financial institutions, insurance companies, and domestic international sales corporations.

File with the IRS:

To form an S-Corporation you must fill out the form 2553 with the IRS. The form is located here: http://www.irs.gov/pub/irs-pdf/f2553.pdf and must be signed by all shareholders.