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Internal Revenue Code of 1986

The main body of federal tax law in the United States, which includes all the rules and regulations for collecting taxes.

S corporation

A type of business entity that passes income, losses, deductions, and credits directly through to its shareholders' personal income, avoiding corporate income tax (also known as 'pass-through taxation').

Shareholders

Individuals or entities who own shares of stock in a corporation, representing a partial ownership stake in the company.

Taxable year

An annual accounting period for which a person or organization calculates their income and files tax returns, typically the calendar year or a fiscal year.

Double taxation

A situation where corporate profits are taxed twice: first at the corporate level when the company earns them, and then again at the individual level when those profits are distributed to shareholders as dividends.