At its foundation, an S corporation is a C corporation that has elected to be taxed as a “pass through” entity. The election is made on Form 2553 and must be filed with the IRS no later than 60 days after the beginning of the year in which the election is to be effective. The election is revocable. Once the business owners have made the election, it remains in effect until the business’s owners revoke it. Instead of being taxed on its income, the S corporation passes the income through to the shareholders, where it is taxed as part of their personal income. S corporations file Form 1120S, a different return from that used by C corporations.