IRS Publication 542 — Corporations
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“Estimated Tax Generally, a corporation must make installment payments if it expects its estimated tax for the year to be $500 or more. If the corporation does not pay the installments when they are due, it could be subject to an underpay- ment penalty.”
Employee-owners. A person is an employee-owner of a personal service corporation if both of the following apply.
1. That person is an employee of the corporation or performs personal services for, or on behalf of, the corporation (even if that person is an independent contractor for other purposes) on any day of the testing period.
2. That person owns any stock in the corporation at any time during the testing period.
Other rules. For other rules that apply to personal service corporations, see Accounting Periods, later. Closely held corporations. A corporation is closely held if all of the following apply.
1. It is not a personal service corporation.
2. At any time during the last half of the tax year, more than 50% of the value of its outstanding stock is, directly or indirectly, owned by or for five or fewer individuals. “Individual” includes certain trusts and private foundations.
For rules for determining stock ownership, see section 544 of the Internal Revenue Code.
Other rules. For the at -risk rules that apply to closely held corporations, see At-Risk Limits, later.
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