Wednesday, September 27, 2017

S CORPORATIONS REVENUE IS A DRIVING FORCE FOR U.S. GDP OVER TIME: SMALL BUT MIGHTY


ABSTRACT OF THE DISSERTATION


S CORPORATIONS REVENUE IS A DRIVING FORCE FOR U.S. GDP OVER TIME: SMALL BUT MIGHTY

by

Niwech Harnkham

©2017 Niwech Harnkham. All rights reserved.



Submitting in Partial Fulfillment of the Requirements for the Degree of 
Doctor of Business Administration
SABI University, 2017-2018

Chairperson & Advisor: Adlan Parsa, PhD, LLM, DEA

S Corporations are generally small businesses with limited number and types of shareholders. An S Corporation’s profits or losses are passed through to its shareholders. Shareholders of S Corporations report their business profit or loss on their tax returns. A recent study by Kelly Luttrell shows that for the tax year 2003, S Corporations accounted for 61.9 percent of the 5.4 million corporate returns filed. S corporation return filings have increased by 36.3 percent since 1997. S Corporation is the most selected legal tax treatment structure based on the same study.
This thesis is a cross-sectional study of S Corporations revenue and U.S. real GDP over the course of 10 consecutive years, ranging from 2004 to 2013. 
The real GDP statistic data from 2004 to 2013 was collected from the Bureau of Economic Analysis, U.S. Department of Commerce’s reports and Interactive Data application. The S Corporations tax statistics data from the tax year 2004 to 2013 was collected from the Statistic of Income’s publications of the Internal Revenue Service, U.S. Department of Treasury.

The IRS Statistics of Income’s sample design type is a probability sampling and a stratified sampling method was used for sample selection. The target population consists of all returns of active S Corporations that filed the Form 1120S to IRS from the tax year 2004 to 2013.
The researcher compiled statistical data based on the Statistics of Income’s sample design and used the quantitative analysis to find the results of this study.
This study reports that S Corporations revenue accounted for 40.19 percent of U.S. GDP over time. This finding concludes that S Corporation is the major contributor to the U.S. GDP over time, even though it is a small business per tax treatment perspective.
S Corporation spends an average of 2.57 percent of its revenue for rent expense over time. This is not a significant percentage. The finding shows that the majority of the S Corporation does not rent a property. However, S Corporation may own the property and claims depreciation. Future research should be conducted to analyze the Depreciation expense of S Corporation from the same IRS’s SOI data.
There are average 1.8 shareholders per single S Corporation over time. The result shows that S Corporation is a small business with one or two shareholders.
This study shows that the following sectors are the top four sectors based on the total net income over time. 
  1. Wholesale and retail trade 
  2. Manufacturing 
  3. Professional, scientific, and technical services 
  4. Healthcare and social assistance.

In addition, the finding shows that the following sectors are the top four sectors based on an advertising expense per their revenue over time.
  1. Educational services
  2. Accommodation and food services
  3. Real estate and rental and leasing
  4. Arts, entertainment, and recreation



Wednesday, April 26, 2017

S Corporations Statistic Analysis of Tax Year 2004

S Corporation is generally a small business with limited number and type of shareholders. S Corporation’s profit or loss is passed through to its shareholders.  Shareholders of S Corporation report their business profit or loss on their tax returns.

This thesis is a cross-sectional study of S Corporations revenue and U.S. real GDP of Tax Year 2004. It is a partial part of another working thesis: “S Corporations Revenue is a Driving Force for U.S. GDP Over time: Small but Mighty.”
The real GDP statistic data of Tax Year 2004 was collected from the Bureau of Economic Analysis, U.S. Department of Commerce’s reports and Interactive Data application. The S Corporations tax statistic data of tax year 2004 was collected from the Statistic of Income’s publications of the Internal Revenue Service, U.S. Department of Treasury.

The IRS SOI’s sample design is a probability sampling category and a stratified sampling method was used for sample selection. Form 1120S was stratified by size of total assets and size of ordinary income. Samples were selected from each stratum independently with sampling rates ranging from 0.25 percent to 100 percent. 

The target population consists of all returns of active S Corporations that filed the form 1120S to IRS of tax year 2004.

The researcher compiled statistic data based on SOI’s sample design and used the quantitative analysis to find the results of this study.

Sample selection for the Tax Year 2004 occurred over the period of July 2004 through June 2006 to account for the S Corporations who use non-calendar year accounting period and who file a six-month extension.

The stratified probability samples of 50,094 S Corporation returns were selected from the total population of 3,697,272. The sample accounted for about 1.35 percent of the total population.

This study shows that the U.S. real GDP is 12,274.9 billion dollars (12,274,900,000 thousand dollars). The S Corporation revenue is 4737.162166 billion dollars (4,737,162,166 thousand dollars).

These are the top four industry sectors based on total net income; Wholesale and retail trade; Manufacturing; Construction; and Professional, scientific, and technical services.
Total Net Income TY 2004

These are the top four industry sectors based on advertising expense per their revenue; Accommodation and food ;  Arts, entertainment, and recreation; Educational services; Real estate and rental and leasing.
 
Advertising per Revenue TY 2004
This study concludes that for Tax Year 2004, S Corporations revenue accounted for 38.59 percent of the U.S. real GDP. The small businesses are the driving force for U.S. GDP for Tax Year 2004.



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