Eligible corporations choose S corporation status by submitting Form 2553. Pass-through businesses like S companies are exempt from federal income tax. Rather, the shareholders record the income, credits, and deductions of the company on their individual tax forms. Small enterprises with fewer stockholders may benefit from this. You need to submit Form 2553 to the IRS if you want to choose S corporation status. Can you submit it electronically though?
Yes, it is the answer. Eligible corporations may electronically submit Form 2553 to the IRS. The corporation must fulfill the following criteria in order to be qualified: Be a domestic corporation with no more than 100 shareholders, individuals, estates, or specific qualified trusts as shareholders, only one class of stock, and no ineligible corporations (such as insurance companies, domestic international sales corporations, or banks). You can use the “Filing Information Returns Electronically” (FIRE) system, an online tool provided by the IRS, to submit Form 2553 electronically. A third-party software supplier that has been authorized by the IRS is another option. There will be a price for the software provider’s services.
Form 2553 can be filed with the IRS for free. However, there may be a fee if you choose to file the form electronically using a third-party software supplier. Depending on the software vendor, the cost varies. To pick the one that best fits your demands and budget, you need compare several suppliers.
You can cancel your election by submitting a letter to the IRS if you decide you no longer wish to be a S corporation. The letter must be signed by a representative of the corporation and contain their name, address, and employment identification number (EIN). In accordance with Internal Revenue Code section 1362(a), you must additionally submit a declaration indicating the corporation is renouncing its election to be a S corporation.
What Is the Form 2553 Submission Deadline?
You must submit Form 2553 by the 15th day of the third month of the tax year in order to elect S company status for the current tax year. For instance, you must submit Form 2553 by March 15 if your tax year starts on January 1. Your choice will take effect for the subsequent tax year if the form is submitted after the due date. What Is the Processing Time for Form 2553?
The precise time frame for processing Form 2553 is not specified by the IRS. However, the IRS normally processes the request and responds within a few weeks to a few months. You will receive a letter from the IRS confirming the election’s start date if they approve your choice. If your election is rejected, they will inform you in writing of the reasons why and what you may do to make things right.
Where can I find a fax number for an IRS notice??” is not related to the topic of the article “Can I Electronically File Form 2553?”. However, you can find the fax number to send an IRS notice on the notice itself or on the IRS website. The fax number may vary depending on the type of notice and your location.
The article “Can I File Form 2553 Online?”