No life insurance deduction and only a partial health insurance deduction. All income is taxed proportionately to each of the partners who report it on their personal tax returns. Shareholders have personal limited liability. S Corporation may not have more than seventy-five shareholders. Shareholders and those owning 5 percent or more in stock have limited employee benefits.
Shareholders have limited personal liability.
Double taxation-the corporation pays taxes on its income and the shareholder pays taxes on dividends. Shareholders cannot deduct the losses of the corporation. No double taxation. May have more than seventy-five members. Active members are subject to self-employment tax for Social Security and Medicare.