IRS Form 2553: How To File S Corp Election Form 2553?

Section 2: Selection of Fiscal Tax Year

You select your tax year here. Most businesses use the calendar year, but some may use a fiscal tax year that is different. If you are applying for a non-calendar year, you will need to provide an explanation.

Selecting the incorrect tax year may cause delays, so ensure this is the same as on your previous tax return filings.

Section 3: Qualified Subchapter S Trust (QSST) Election Under Section 1361(d)(2)

If one of your shareholders is a trust, and that trust wants to be handled as a Qualified Subchapter S Trust (QSST), you require to fill out this part. The trust must also offer formal authorization for the election by a small enterprise.

Section 4: Late Corporate Classification Election Representations

If you are filing the form after the IRS deadline, this part is important. It allows you to describe the reason your corporation election is late and provides an opportunity to request late acceptance.

You will need to provide reasonable cause for failing to meet the deadline and put in some added statements.

Process Of Submitting Complete Form 2553

Once you’ve filled out all the sections, it’s time to send in your complete Form 2553. Here’s how:

1. Double-check all information, especially your EIN and business name
2. Make sure all shareholders sign where needed
3. Keep a copy for your records
4. Mail or fax the form to the IRS office for your state

You can also submit it through a CPA professional like BestCFO if you’d rather not handle it yourself.

Deadline Of Submission 2553?

To get S corp status for the current tax year, you must file Form 2553:

• No more than two months and 15 days after the beginning of the tax year you want the change to start
• Or any time in the year before the new tax year begins

If you’re late, you might still be accepted if you have a good reason. But don’t count on it—get it in on time to avoid issues with your income tax or federal tax filings.

Final Thoughts

Selecting S corporation status can benefit your small company corporation by saving it money on taxes. It can also make your company seem more professional. However, filing needs to be undertaken with some caution.

Whether you’re an existing LLC seeking to alter your elect s corp status or an initial business planning ahead, IRS S Corp Election Form 2553 is your initial move. Simply ensure you qualify, meet the deadline, and file the form with all the correct information.

FAQs

What is IRS Form 2553 used for?

It’s the official form to elect S corporation status with the IRS. This helps a business avoid double taxation and pass profits directly to the owners’ income tax return.

Can an LLC file Form 2553?

Yes. If the LLC meets the rules for S corps, it can use this tax form to change its corporation status.

What happens if I miss the Form 2553 deadline?

You may still qualify for late election by a small business if you have a valid reason. Fill out Section 4 and attach your explanation.

Does filing Form 2553 affect my state taxes?

It depends. Some states honor the federal corp election, while others require a separate tax filing.

Is it hard to file Form 2553 by myself?

It’s not too hard if you follow each section closely. Still, working with a tax expert can make it smoother and ensure everything is filled out correctly.