Understanding the differences between the two different ways a Corporation can be taxed is essential in deciding what is best for your company.
There are two different ways a Corporation can be taxed. (C) Corporations, are considered separate tax payers, and (S) Corporations are referred to as a pass thru. All Corporations when they are formed will default to the (C) classification. So if you want to be taxed as an (S) Corporation you must file form 2553 with the IRS. Either (C) or (S) taxation can be beneficial. However, what is right for you will depend upon your business.
In the following short video, Scott defines how a (C) Corporation is taxed vs. an (S) Corporation.