In order to apply for S-corporation status for federal income tax purposes, qualifying corporations must submit Form 2553, commonly known as the Election by a Small Business Corporation. An S-corporation is a type of corporation that permits pass-through taxes, in which case corporate income and losses are recorded on the shareholders’ individual tax returns and not on the firm as a whole.
Where should Form 2553 be sent then? The location of your company and the delivery method you pick will determine the answer. You must submit Form 2553 to the IRS Service Center designated for your state if your company’s primary location is one of the 50 states or the District of Columbia. By visiting the IRS website or phoning the IRS Business and Specialty Tax Line at 800-829-4933, you may locate the correct postal address for your state.
If you decide to use a private delivery service, you must submit your Form 2553 to the state’s IRS address. The address might, however, be different from the one for ordinary mail. Again, the IRS website has the exact location for your state.
Can you now submit an S-corp election online? Regrettably, Form 2553 cannot now be filed electronically with the IRS. However, a number of companies that sell tax software provide e-filing services for Form 2553. Make careful you pick a dependable supplier who has received IRS approval.
Should an LLC submit Form 2553? No, LLCs are exempt from submitting Form 2553. However, LLCs that satisfy the prerequisites for S-corporation eligibility may elect to submit Form 2553 to request S-corporation status.
Can an LLC with one member file Form 2553? LLCs with a single member cannot submit Form 2553. The IRS only accepts S-corporation applications from qualifying LLCs with more than one member and corporations with more than one shareholder.
For qualifying corporations to apply for S-corporation status and benefit from pass-through taxation, Form 2553 is an essential document. You must utilize an authorized e-filing service or mail the form to the IRS Service Center designated for your state. If an LLC satisfies the qualifying requirements, it may submit Form 2553; however, single-member LLCs are ineligible.
You must include information about your LLC, including its name, address, employer identification number (EIN), and the date it was founded, on Form 2553 for an LLC. Additionally, you must disclose the names of the LLC’s owners as well as the quantity of shares that each owns. After filling out the form, you must date it, sign it, and send it to the relevant IRS office. To avoid any delays or problems with your LLC’s tax status, make sure you carefully read all instructions and supply proper information.