So making the S election or deciding you don’t need to make an S election and you’re going to be treated as a regular corporation. Why it’s important upfront is because that does sort of set the stage for how your tax going forward. You’re supposed to make the S selection within the first 75 days of formation. If you miss that deadline, there is a procedure under the internal revenue code to request a late election. That becomes much more complicated if you’ve filed tax returns already.

Converting from a C Corporation to an S Corporation once you’ve filed returns could certainly add layers of complication. It’s doable, but that also adds layers of expense. And not only are you working with your lawyers, but also your tax accountants. So we always recommend that it’s a thorough analysis up front. You make the election and then you work with it until it doesn’t work for you any longer.