How to Start an S Corp in Wisconsin

Is an S Corporation the Best Strategy for Your Business?

For help with choosing the right structure for your business, visit ourChoosing a Business Structureguide.

S Corporation Restrictions

S corps have several restrictions, such as being limited to one class of stock and 100 shareholders. Read ourWhat Is an S Corporationguide for full details.

Are S Corp Tax Advantages Right for You?

An S corporation is a tax designation that can be elected by an LLC or corporation. With an S corp, business owners are considered employees of the company and must receive areasonable salary．因为所有年代队技术员工,the s corp must run payroll.

In order to benefit from a Wisconsin S corp tax designation, your business needs to make enough money to offset payroll expenses. Furthermore, S corps are beneficial for business owners who take largedistributionsin addition to their salary.

To learn more about the tax advantages of an S corp, read ourLLC vs. S corpguide and take a look at ourS Corp tax calculator．

Steps for Forming an LLC and Electing S Corp Status in Wisconsin

Starting a Wisconsin LLC and electing S corp tax status is easy. You can use our guides to start an LLC with the S corp status yourself, or you can hire a service provider likeNorthwestto guide you through this process.

There are five basic steps to start an LLC and elect S corp status:

Step 1:Name Your LLC

Step 2:Choose a Registered Agent

Step 3:File the Articles of Organization

Step 4:Create an Operating Agreement

步骤5:Get an EIN and File Form 2553 to Elect S Corp Tax Status

Step 1: Name Your LLC

Choosing a company name is the first and most important step in starting your LLC in Wisconsin.

一定要选择一个名称符合Wisconsin naming requirements and is easily searchable by potential clients.

1. Follow the naming guidelines for a Wisconsin LLC:

• Your namemustcontain the phrase “limited liability company”or “limited liability co.” or end with one of their abbreviations (LLCorL.L.C.).
• Your namecannotimply that the LLC was organized for any non-permitted purpose.
• Your namecannotinclude words that could confuse your LLC with agovernment agency(FBI, Treasury, State Department, etc.).
• Certainrestricted words(e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual to be part of your LLC.
• Your namemust be distinguishablefrom any existing business in the state. This includes Wisconsin reserved names.
• You can read anoverview of name availabilityfrom the Wisconsin Department of Financial Institutions for more information.

You can also read theWisconsin state statuteabout LLC naming guidelines for more information.

2. Is the name available in Wisconsin?Make sure the name you want is available by doing a corporate record search on theWisconsin Department of Financial Institutionswebsite.

3. Is the URL available?We recommend checking to see if your business name is available as a网络域．Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.

Wisconsin S Corp Annual Report

The state of Wisconsin requires all businesses operating within its borders tofile an annual reportwith the Wisconsin Department of Financial Institutions. This report is due every year at the end of the quarter in which you formed your business. If you started your business in January 2022, for example, your annual report will be due on March 31, 2023.

Visit ourWisconsin Annual Reportguide for a step-by-step overview of the filing process.

Wisconsin S Corp Taxes

S corporations benefit from pass-through taxation, meaning the business’s profits pass-through to S corp owners’ individual tax returns. S corp owners make money from theirreasonable salaryanddistributions, and Wisconsin S corp owners can expect to pay the following taxes:

Federal Self-Employment Taxes

Self-employment taxes cover social security and medicare. The self-employment tax rate is 15.3%, and money you take as salary will be subjected to the self-employment tax. However, distributions are not subjected to this tax.

Federal Income Taxes

Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets as well as the percent owed will change each year. Both your salary and distributions are subjected to federal income tax.

Wisconsin Income Taxes

Wisconsin has a graduated income tax that ranges from 3.54% to 7.65%, depending on your total income. This means you’ll pay a smaller percentage if you have a low-income year vs. a high-income year. Even with a higher income, the maximum income tax rate is 7.65%.

因为一些国家s impose income tax rates of more than 10%, Wisconsin is one of the more business-friendly states in which to start a company.

Wisconsin Sales and Use Tax

Wisconsin's sales and use tax is set at 5% with a 0.5% county sales tax for a total of at least 5.5%. Some cities within the state also impose additional sales and use taxes. Check with theWisconsin Department of Revenuefor more information.

Additional State Taxes

The Wisconsin Department of Revenue outlines many state-specific taxes it may require your business to pay. Some examples that might apply to a small business owner include:

• Dry Cleaning Tax
• Alcohol Beverages Tax
• Cigarette Tax
• Fuel Tax
• Tobacco Products Tax

Visit theWisconsin Department of Revenuewebsite for more information.

Wisconsin Local Taxes

Depending on where you open your business — whether that's in Milwaukee, Madison, or any of the smaller cities — each municipality may require you to file and pay specific taxes based on your location. Check with your local government to ensure your business remains in good standing with local laws and guidelines.