Personal Service

WHAT IS A PERSONAL SERVICE CORPORATION?

According to the United States tax law, a corporation is a personal service corporation if it meets ALL of the following requirements:

  1. Its principal activity during the “testing period” is performing personal services (defined later). Generally, the testing period for any tax year is the tax year that immediately precedes the current. If the corporation has just recently been formed, the testing period begins on the first day of its tax year and ends earlier if:
    • It is the last day of its tax year, or
    • It is the last day of the calendar year in which its tax year begins.
  2. Its employee-owners substantially perform the services in (1). This requirement is met if more than 20% of the corporation’s compensation cost for its activities of performing personal services during the testing period is for personal services performed by employee-owners.
  3. Its employee-owners own more than 10% of the fair market value of its outstanding stock on the last day of the testing period.

Personal services include any activity that is performed in any of the following fields: accounting, actuarial science, architecture, consulting, engineering, health (including veterinary services), law, and the performing arts.

A person is an employee-owner of a personal service corporation if both of the following apply:

  • They are an employee of the corporation or perform personal services for, or on behalf of, the corporation (even if they are an independent contractor for other purposes) on any day of the testing period
  • They own stock in the corporation at any time during the testing period
/
Price: $ 249.00

   

We are an online federal filing service and are in no way affiliated with any government agency. If you would like to apply directly with the IRS, you can click here. Use our service and save time and effort by not filling out complicated forms.

Home     Apply Now     Services     FAQ     Terms of Service     Privacy Policy     Contact Us

© einwizard.com 2022

A subsidiary of Weiss 2.0

We are an online federal filing service and are in no way affiliated with any government agency. If you would like to apply directly with the IRS, you can click here. Use our service and save time and effort by not filling out complicated forms.

© einwizard.com 2022

A subsidiary of Weiss 2.0