Do You Need an Accountant to Set Up an S Corp? Here’s the Real Answer.

Thinking About Setting Up an S Corporation?

You might be wondering if you need an accountant to do it. The short answer: No, you don’t. In fact, Congress and most state governments have made the process surprisingly straightforward.

You just need to find the right forms and fill in the blanks—often, it's as easy as entering your name and address.

Want the longer answer? It depends. While you don’t need an accountant to set up an S Corp, there are situations where professional help makes a lot of sense.

Let’s break it all down.

How to Set Up an S Corp: A Simple Step-by-Step

1. Form a Corporation or an LLC. File Articles of Incorporation (for a corporation) or Articles of Organization (for an LLC) with your state (this is usually done online).

   
   

2. Obtain an EIN (Employer Identification Number). Apply directly on the IRS website and get your EIN almost immediately.

   
   

3. Fill out and Mail IRS Form 2553. You can read instructions to this form here.

   
   

4. Get Your State Tax ID. Depending on your state, you may need to get a separate ID for your shareholder payroll and other business taxes.

   
   

5. Meet State and Federal Compliance Requirements. Depending on the state, this might include:

• Drafting bylaws (for corporations)

• Holding initial board meetings

• Keeping minutes

• Filing annual reports

  
  

When DIY Works Just Fine

If you’re a single S Corp owner, setup is simple. There’s no one else to negotiate with—what are you going to argue about with yourself?

You can follow the steps above or use an online legal service like LegalZoom or CorpNet who will file forms for you. They all offer similar results, so shop around for the best price.

Pro Tip: These online companies offer registered agent services, something that is hard for you to do on your own. Unless you find your own registered agent, your personal name and address become public business records—yes, online. A registered agent protects your privacy.

When to Bring in a Business Attorney

If you have multiple shareholders, I suggest you get a business attorney. Here’s why:

• You’ll need a shareholder agreement.

• You have to plan for ownership changes, disputes, and voting rights.

• A lawyer ensures your bylaws and operating agreements are custom-tailored, not copied from a template.

  
  

We refer all difficult S Corp cases to San Diego Corporate Law. Mike and Christina do a wonderful job consulting business owners and preparing all the legal paperwork.

Can your accountant handle all of this? Nope. Accountants aren’t attorneys and shouldn’t touch legal documents. In fact, many states prohibit CPAs from preparing legal paperwork as it’s outside their scope of practice.

However, some CPAs still offer to “set up” your S Corp, but in most cases they just outsource to online services —and maybe collects a referral fee along the way.

Pro Tip: If your accountant says, “I’ll handle it,” ask them how—and make sure they’re not acting as a middleman.

When You Actually Do Need an Accountant

• Determining S Corp Eligibility & Filing Form 2553. A CPA can confirm you qualify to set up an S Corp (the IRS is pretty strict about S Corp eligibility). An accountant can also file form 2553, since it is an IRS form.

  
  

• Setting Up Payroll & Accounting Systems.Your accountant can register you for the state payroll ID, set up your chart of accounts, create rules in QBO, and get you started with bank reconciliations. After that you can decide if you want to use their accounting services and try to do accounting and payroll yourself. But the initial accounting and payroll set up by an accountant is highly recommended.

  
  

• Structuring Salary vs. Distributions. S Corps must pay a reasonable salary before profit distributions. There is an online service that help you to come up with a number for reasonable compensation, but CPAs have several tricks up their sleeves and can offer a few smart tax strategies.

  
  

• Understanding State-Specific Tax Rules. Some states impose special fees or franchise taxes on S Corps. Your accountant will make sure you know how and when to pay them.

Final Thoughts

You don’t need an accountant to set up an S Corp—just like you don’t need a lawyer to write your will or a plumber to install a faucet. But skipping the right help at the wrong time can cost you.

Here’s the real takeaway:

• If you're a solo owner, go ahead and DIY or use an online service.

• If you have partners, bring in a business attorney.

• Once you’re set up, get an accountant involved for payroll, taxes, and accounting systems.

Feeling overwhelmed by it all? We don't blame you. We’re here to help—as our focus is only on S Corp business owners. Please feel free to check out our services here.