Under the Internal Revenue Code, the default tax structure for a Virginia corporation is to be taxed as a corporation under the Internal Revenue Code. The corporate tax structure under the Internal Revenue Code provides a separate tax rate table for corporations and any income generated by a Virginia corporation is subject to the corporate tax rules and the corporate tax rates. The corporate tax structure is often categorized as a dougle tax structure because any profits of the corporation are first taxed at the corporate level and then taxed again if those profits are distributed to shareholders as dividends. A Virginia corporation is eligible to elect to be taxed as an S corporation if the Virginia corporation and its shareholders meet the requirements for S corporation status under the Internal Revenue Code. An S corporation is taxed as a pass through and is only subject to one level of taxation. Tax structure can be quite complicated and the different tax choices offer different tax benefits and disadvantages. Accordingly, if you need assistance, it is recommend you speak to your CPA to determine the best tax structure for your Virginia corporation. You do not need to make this decision immediately at formation of your Virginia corporation. You can form your Virginia corporation and make the decision soon afterwards.

The default tax structure for a Virginia corporation is the C corporation tax structure under the Internal Revenue Code. If you decide that this is the desired tax structure for your Virginia corporation, no elections are required with the IRS. Upon incorporation of your Virginia corporation, if shareholders are not sure whether they want the Virginia corporation to elect S Corporation tax treatment, they can just choose the default classification of purposes of obtaining an EIN#. Generally, you have 75 days after formation of a Virginia corporation to make an election to be taxed as a Corporation. We suggest that you consult with an accountant to confirm this information as the IRS changes its rules often. A competent tax accountant can recommend the best tax classification for your business. Please know that any choice of taxation for a Virginia corporation is not set in stone. A Virginia corporation may change its tax structure each year. Please note there may be tax consequences and there are specific timeframes each year for when you would want to change the tax structure of a Virginia corporation so please seek the advice of a CPA prior to making any decisions.

Yes. Tax classifications for a Virginia corporation can be changed each year. There are specific time frames for changing a Virginia corporation's tax classification each year (generally for federal purposes, no later than 75 days after the commencemnt of each tax year). Also, there may be signficiant tax consequences resulting from a change so you should consult a CPA to understand the implications.