Form 2553 helps businesses avoid double taxation. This form must be submitted no later than 2 months and 15 days after the beginning of the taxation year in which the election takes effect. For newly created corporations, the taxation year begins on the day the corporation is incorporated. Form 2553 can be filed after the deadline. However, you must explain the reason for your delay to the IRS in Part 4 of the document. The IRS will only honor late submissions if they are received within 3 years and 75 days of the expected effective date. Many small businesses choose integration to take advantage of the multiple benefits of this legal deposit, including limited personal liability, increased credibility, and tax benefits. For U.S. business owners considering an S Corporation classification, it is necessary to file Form 2553 with the U.S. Internal Revenue Service (IRS) at the beginning of the tax year.
IRS Form 8832 is a form that allows you to change your company`s «tax election» status. We`ll tell you everything you need to know about Form 8832, where to get it, how to fill it out, and where to file it. There is also another important feature of Form 8832, and that is if you want to change your tax classification to an S corporation and file Form 2553 late. If you forget and do not file your return before March 15, 2553, you must file your Form 2553 and Form 8832 together, this is called «late election relief.» If you file Form 8832 at the same time as a subsequent Form 2553, you will need to provide a «reasonable reason» why you did not file it earlier. However, if a public fax machine is used, only the paper form appears to be able to be used. Therefore, the following steps are introduced, which are based on faxing documents from a public fax machine. Form 2553, elected by a small business, is an Internal Revenue Service form that can be filed by a corporation to elect to be registered as an S Corporation rather than a C Corporation. If your business is a multi-owner LLC, it will be classified as a default partnership.
You can use Form 8832 to be taxed as a C-Corp. If you want the LLC to be taxed as an S Corp, see Form 2553. This section of the form refers to the S Trusts (QSST) qualified subchapters. An EQST is an estate planning tool that comes into effect upon the death of an S Corporation shareholder and the transfer of ownership to a trust to a single beneficiary. If this does not apply to your situation, you can skip this section. An LLC that is authorized to elect S status and file an S election in a timely manner (Form 2553, Small Business Corporation Election) is deemed to have elected to be taxed as a corporation (Regs. Sec. 301.7701-3(c)(1)(v)(C)). These entities are not required to file Form 8832, Entity Classification Election. Other corporations file the election to tax as a corporation on Form 8832 under Regs.
No. 301.7701-3(c). Depending on your long-term business goals, filing Form 2553 may save you money now, but may not be the best choice for your future. For example, if you intend to go public, it cannot operate as an S corporation. Be sure to consult with an accountant to determine if S Corporation`s status will help you achieve your growth goals. When you send it, you can send the original choice, not photocopies. The mailing addresses are as follows: Please send the form to: Department of the TreasuryInternal Revenue Service CenterKansas City, MO 64999 In order for a corporation to qualify as an S corporation based on its annual taxes, it must file Form 2553 no later than the 15th day of the 3rd month following the beginning of its taxation year. Often, a company`s fiscal year is the same as the calendar year (January – December). However, if a business uses another taxation year (for example, July to June), it is considered a tax year. Thus, the deadline for Form 2553 is not a specific calendar date for all businesses, but is based on the single tax year. Form 2553 can usually be filed by yourself, but in some circumstances you may also need to file Form 8832.
You will file Form 8832 if you file your Form 2553 S Corporation late. Generally, Form 2553 must be filed by March 15 of the taxation year in which you wish to be classified as an S corporation. If you file your return early, simply file Form 2553. This last part is only required if you file Form 2553 after the deadline. Late submissions must be explained in the Appendix. If you are an LLC, you can generally choose to be taxed as an S Corporation by filing Form 2553 «Election By a Small Business Corporation» with the IRS. You can fill out the form yourself or ask Incfile to complete and submit it on your behalf. Form IRS 8832 is used to select classification for federal tax purposes. It is most often used by an LLC that wants to be taxed as a C corporation.
Exemptions under this revenue procedure are possible if Form 2553 (or Form 8832 if this form should have been filed) is late. Revision Proc. 2013-30 allows the company to opt for S status by filing Form 2553. The election may be filed using the current Form 1120-S if all previous Form 1120-S have been filed, or may be attached to the first Form 1120-S for the year, including the expected effective date if filed at the same time as another failing Form 1120-S. Form 2553 can also be filed separately. Forms must be submitted within three years and 75 days of the originally scheduled effective date of the election. The information and returns required by Proc. 2013-30, as well as supplementary reports regarding a late election of business classification (required under Proc. 2013-30, section 5.03), must be filed with Form 2553. If this revenue procedure is followed, Form 8832 does not need to be filed. Only Form 2553 and the required returns need to be filed. Businesses can file Form 2553 by fax or mail.
The IRS website contains a list of the appropriate address or fax number to use depending on the state in which the business is located: www.irs.gov/pub/irs-pdf/i2553.pdf. Form 2553 cannot be filed online. The first section of Form 2553 asks for identifying information such as the name, address and employer identification number of the business. Similar to a Social Security number, an Employer Identification Number (also known as an EIN) is a unique series of numbers used to identify a business for tax purposes and to prove identity.