Each shareholder should sign and date the shareholder’s consent statement located in box K. Enter the name of the corporate representative that the IRS may contact in box H. If the corporation (entity) doesn’t have an EIN, it must apply for one. For the latest information about developments related to Form 2553 and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form2553. To better understand when an LLC would file (or not file) Forms 2553 and 8832, let’s explore three real-world scenarios. These examples illustrate different situations an LLC owner might face, and show the outcomes with the help of breakdown tables.

• If the letter is a confirmation of your approval for S corporation status, make sure to safely store it as your proof of acceptance.
• IRS Notice 264 lists the reasons your S corporation election was denied.
• Shareholders of an S-corp must report their share of the corporation’s income, deductions, and credits on their personal tax returns.
• Depending on the state you live in, you may need to file a 2553 form for both federal and state taxes.
• In this section, you simply need to check all the boxes that apply to your situation.

IRS Form 2553 Filing Deadline

For assistance, review the “specific instructions” section of the IRS instructions to Form 2553. Discover how to craft an effective accounting policies and procedures manual in 2025. Explore a detailed guide, customizable template and real-world examples. We’ll go into detail on what each page is for below, along with step-by-step instructions for how to fill in Form 2553 correctly. This section is similar to Part I, you’ll need to fill in the income beneficiary’s name, address, and Social Security number, as well as the trust’s name, address, and EIN.

When to File Form 2553

Check box Q2 to show that the corporation intends to make a backup section 444 election in the event the corporation’s business purpose request is not approved. This is an election to select a tax year other than the required tax year. For an election filed before the effective date entered for item E, only shareholders who own stock on the day the election is made need to consent to the election. If this change qualifies as an automatic approval request (Form 1128, Part II), file Form 1128 as an attachment to Form 2553.

Form 8832 vs. Form 2553 vs. Default: Choosing the Right Tax Path for Your LLC

Completed forms must be sent to the correct IRS address or fax number. The address varies based on the location of the business. The IRS website provides current mailing and fax options. In order to become an S corporation, the corporation must submit Form 2553, Election by a Small Business Corporation signed by all the shareholders. See the Instructions for Form 2553 PDF for all required information and to determine where to file the form. If you check Box Q1, a user fee of $6,200 will apply.

Form 2553 must be filed to the IRS address or fax number that applies to your state, depending on where your principal business, office, or agency is located. Form 2553 details two sets of submission addresses and fax numbers for different states, so it’s important to file Form 2553 to the correct address or fax number. As mentioned earlier, making a mistake when filing Form 2553 to elect S corporation status can result in a rejection by the IRS. This makes it vital to ensure all your details are accurate and correctly provided when filling in Form 2553. This section requires you to provide information like your company’s name, address, and employer identification number (EIN) and the names of shareholders and their percentage ownership. Check the box that corresponds with the S corporation’s selected tax year.

About Form 2553, Election by a Small Business Corporation

Once completed, you’ll be notified roughly 60 days after you filed whether your election was accepted or denied. Read on for the step-by-step instructions for Form 2553. The service center form 2553 will notify the corporation (entity) if its election is accepted and when it will take effect. The corporation (entity) will also be notified if its election isn’t accepted. The corporation (entity) should generally receive a determination on its election within 60 days after it has filed Form 2553. If box Q1 in Part II is checked, the corporation (entity) will receive a ruling letter from the IRS that either approves or denies the selected tax year.

As an LLC owner, carefully weigh the tax and administrative implications of each path. Often, consulting with a CPA or tax advisor can help determine which election (if any) will benefit your situation. Timely file a paper copy of Form 2553 with the appropriate Service Center as directed in the Form 2553 instructions PDF. See instructions to Form 2553 for mailing addresses and fax numbers. Reviewing the corporation’s status periodically with a tax advisor can ensure compliance.

Schedule (K- Instructions: How to File in 11 Steps

• But as an S-corporation shareholder, you’re considered an employee and pay yourself a reasonable salary that’s subject to income tax, Social Security, and Medicare taxes.
• Form 2553 can be submitted to the IRS either by mail or fax.
• Enter the number of shares owned as of the election date, and the date or dates the stock was acquired.
• To revoke an S-election, you should submit a statement of revocation to the service center where you file your annual return.
• If the corporation (entity) doesn’t have an EIN, it must apply for one.

Line F allows you to select the tax year your business uses. Options include the calendar year, a fiscal year ending on any month and day, a week year ending in December, and a week year ending in another month. As we mentioned earlier, S-Corp filing dates are based on what your business considers a tax year.

LLC Electing S Corp Status

Some owners also want the choice to not pay themselves and that’s not possible with an S corp classification. The final section must include the name and address of all shareholders and their signatures consenting to S corp election. Form 2553 is used by limited liability companies (LLCs) and corporations to elect the S corporation (S corp) tax classification with the US Internal Revenue Service (IRS). The purpose of Form 2553 is to allow certain small businesses to choose to be taxed as an S corporation. After filing Form 2553, you can generally expect a response from the IRS within 60 days.

Download our free customizable month-end closing checklist template, complete with a step-by-step guide outlining accounting close procedures for accuracy, compliance and insightful reporting. Under the identifying information, you’ll need to supply the date on which stock of the corporation was transferred to the trust. We ask for the information on this form to carry out the Internal Revenue laws of the United States.