You must complete Form 2553 if you are a small business owner hoping to benefit from the tax advantages associated with S-corporation status. You can choose S-corporation status for your company with the IRS using this form. Here is a step-by-step tutorial for completing Form 2553.
Make sure your company qualifies for S-corporation status before completing Form 2553. Your company must meet a number of requirements in order to be eligible, including being a domestic corporation with no more than 100 shareholders. On the IRS website, you may discover a comprehensive list of eligibility conditions.
You must fill out Form 2553 with basic information about your company, such as the legal name and address. The tax identification number (TIN) for your company must also be provided.
The selection of your effective date on Form 2553 is one of the most crucial choices you’ll have to make. Your S-corporation status will start as of this date. The first day of the following tax year, the day you submit the form, or another day during the current tax year are all viable options.
Step 4: Collect Signatures After you have completed Form 2553 with all the necessary information, you must obtain the signatures of each shareholder as well as the corporation’s authorized official or agent. Before sending the document to the IRS, be sure everyone has signed it and included their dates.
Furthermore, is Form 2553 Fileable by a Single Member LLC?
A one-member LLC is unable to submit Form 2553. To choose S-corporation status, you must first create a new corporation and use Form 2553 to pick S-corporation status for that corporation if you are the sole owner of an LLC.
The IRS normally needs 60 days to process Form 2553. Processing times, however, can differ based on a number of variables, such as the season and the difficulty of your application. Do I Have to File Forms 8832 and 2553 Together?
No, you don’t have to submit both Form 2553 and Form 8832 (Entity Classification Election). To choose a new tax classification for your company, such as a C-corporation or partnership, you must complete Form 8832. Form 2553 must be submitted if you’ve already submitted Form 8832 and wish to elect S-corporation status.