In order to become an S corporation, the corporation must submit a completed Form 2553 (Election by a Small Business Corporation) that has been signed by all the shareholders. The following information must be provided: The corporation’s name and address. The tax year when the election will take effect.

When can I file S-Corp election?

A corporation or LLC must file an S-Corp election within two months and 15 days (~75 days total) of the date of formation for the election to take effect in the first tax year. Example: Your articles of formation was filed on August 21st. Two months later is counted to the numerically corresponding day of October 21st.

What is as corporation tax election with form 2553?

Businesses can file IRS Form 2553, Election by a Small Business Corporation and elect to form an S corporation instead of a C corporation. Form 2553 allows a small business to register as an S corp rather than a C corp, and this comes with significant tax benefits that can save your company money during tax season.

Can a C corporation file IRS Form 2553?

A corporation can file Form 2553 to elect “S” corporation (also known as an “S Corp” or “Subchapter S Corporation”) federal tax classification with the IRS. Alternatively, form 8832 can change the tax classification to the C Corporation, partnership, or disregarded entity.

What do I need to know about Form 2553?

A corporation or other entity eligible to be treated as a corporation files this form to make an election under section 1362(a) to be an S corporation. A corporation or other entity eligible to be treated as a corporation files this form to make an election under section 1362(a) to be an S corporation. Current Revision Form 2553 (PDF)

Can a single member LLC file Form 2553?

Corporations, single-member LLCs, and multi-member LLCs can all file Form 2553 so they can elect to be taxed as an S corp. However, your entity must: Be a domestic corporation or entity. Have no more than 100 shareholders (these are owners of the business).

When to file Form 2553 for sole proprietorship?

If you don’t, you’ll be taxed as a sole proprietorship in 2020 and as an S corp in 2021. You must file Form 2553 within two months and 15 days of the beginning of the tax year that you want your S corp tax treatment to start. For example, if you want your existing LLC to be taxed as an S corp in 2020, you need to file Form 2553 by March 15, 2020.