S-Corp: An S corporation is a standard corporation that has elected a special tax status with the IRS. The formation requirements are the same as those for C corporations: incorporation documents must be filed with the state and appropriate filing fees paid. The S corporation's special tax status eliminates the double-taxation that can occur with a C corporation’s income. A corporate income tax return is filed, but no tax is paid at the corporate level. Instead, business profits or losses "pass-through" to shareholders and are then reported on their individual tax returns. Any tax due is paid by shareholders at their individual tax rates.