Personal Service Corporation

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A Personal Service Corporation (PSC) is a business entity in which the owners themselves provide professional services for the corporation like an employee. A personal service corporation is a unique corporation that receives tax benefits if it can meet the IRS ownership requirements.

Requirements include:

  • 10 percent of the stock by value is owned by the professionals who provide personal service for the corporation
  • Personal services include the fields of accounting, architecture, actuarial science, consulting, engineering, health, law, or the performing arts

Like other corporations, a personal service corporation must file articles of incorporation at its respective state agency responsible for regulating businesses.

This specific type of corporation includes fringe benefits only available to corporations, limited liability, as well as lower corporate tax rates for employee-owners. Moreover, any income retained by the personal service cooperation is subject to the corporate tax rate, whereas any salaries paid to employees are considered tax-deductible business expenses.

 

Should a Personal Service Corporation Apply for a Federal Tax ID?

 

Because a personal service corporation is a corporation, taxes flow through the business was well as the shareholders (employee-owners). Therefore, all personal service corporations are required to obtain what is called an Employer Identification Number (EIN), or a Federal Tax ID number.

The Internal Revenue Service (IRS) issues EINs to distinguish various business entities, including sole proprietors, corporations, limited liability companies, and partnerships.

Don’t wait to obtain this important Employer Identification Number.

Our online forms are quick to read and easy to navigate, and we work hard to get your Tax ID number to you quickly and professionally.

If you’re operating as a personal service corporation, get your Federal Tax ID Number from us today.