For small firms who desire to convert to a S Corporation, Form 2553 is a crucial document. By submitting the form to the IRS, a company can elect to be treated as a pass-through entity, meaning that its profits are passed on to its shareholders for personal income tax purposes rather than the company paying taxes on them directly. Here are instructions on how to complete a S Corp Form 2553 and solutions to certain associated queries.
You can submit Form 2553 electronically via the Electronic Federal Tax Payment System (EFTPS) on the IRS’s website. To be able to send money electronically, you must obtain an EIN (Employer Identification Number).
No, unless you want to modify your status as a S Corporation, you only need to submit Form 2553 once. You do not need to submit the form once again if your company is still eligible to operate as a S Corporation.
The IRS does not recognize a single member LLC as a separate tax company, so it cannot submit Form 2553. A single member LLC, however, has the option to elect to be taxed as a S Corporation by first submitting Form 8832 to be recognized as a separate legal entity from its owner and then submitting Form 2553.
Where Should I Send My 2553? The IRS Service Center where you submitted your most recent tax return will accept your completed Form 2553. The address is listed in the Form 2553 instructions. The paperwork must be submitted no later than two months and fifteen days following the start of the tax year for which you wish the S Corporation status to be effective.
Here is how to complete Form 2553 now that you have answers to some of the most frequently asked questions regarding it: 1. At the top of the form, enter your company name, address, EIN, and tax year. 2. Tick the box next to the day on which you want the S Corporation election to take effect. 3. State whether the company has been around for more than 60 months. Shareholder information, such as names, addresses, and social security numbers, should be provided.
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* 9. 6. Request signatures and dates from each shareholder on the consent statement at the bottom of the paper.
You can successfully complete and submit Form 2553 to register as a S Corporation and take advantage of the associated tax advantages by following these procedures.
You are not required to submit both Form 2553 and Form 8832. To alter an entity’s tax classification, such as from a partnership to a S corporation, utilize Form 8832. Once the firm has been designated as a S corporation, all that is required to elect S corporation status for tax purposes is to submit Form 2553.