You can file your Form 2553 with the IRS online , by fax, or by mail. For more detailed information about S corporations and making the election, see Instructions for Form 2553, available at www.irs.gov.
Do I need an EIN to file form 2553?
To apply for an S-corp election, you must submit a Form 2553 to the IRS . You will need an Employer Identification Number (EIN), which is also issued by the IRS. ... If you submit the application after this point, your S-corp election will not apply to your current fiscal year.
Can I electronically file Form 2553?
Filing options for IRS Form 2553 include mail and fax filing. You cannot file this form online .
Can form 2553 be faxed?
To change an entity's filing status from a C Corporation (filing Form 1120) to an S Corporation (filing Form 1120S), the entity will file Form 2553 – Election by a Small Business Corporation. The form can be either faxed or mailed to the appropriate IRS Service Center .
Does it cost to file form 2553?
Do not pay the fee when filing Form 2553 . The Service Center will send Form 2553 to the IRS in Washington, DC, who, in turn, will notify the corporation that the fee is due.
How late can you file form 2553?
Form 2553 generally must be filed no later than 2 months and 15 days after the date entered for item E . For details and exceptions, see When To Make the Election and Relief for Late Elections, earlier.
What is the purpose of IRS Form 2553?
The main purpose of IRS Form 2553 is for a small business to register as an S Corporation rather than the default C Corporation. Most business owners file this form for tax purposes. S Corps save on taxes because the corporation's taxable income is only taxed once to the shareholders of the corporation.
When must an S Corp election be made?
A corporation or LLC must file an S-Corp election within two months and 15 days (~75 days total) of the date of formation for the election to take effect in the first tax year. Example: Your articles of formation was filed on August 21st.
How much does it cost to file S Corp?
There is no filing fee , but there are some timing restrictions on when you can file. To qualify for S corporation status, you must meet certain legal standards, such as no more than 100 shareholders and only one class of stock.
What is reasonable cause for filing form 2553 late?
The entity has reasonable cause for its failure to make the election timely; The entity and all shareholders reported their income consistent with an S corporation election in effect for the year the election should have been made and all subsequent years ; and.
What does S election effective date mean?
The election is effective in the current year if it is made before the 16th day of the third month of the corporation's tax year or within 2 1/2 months of the incorporation date or the start of the business . If your client decides to make the election by March 16, the IRS will allow you to file the 1120 as a 1120S.
Do you have to elect S corp status every year?
To be treated as an S corp, a small business must make a special election under subchapter S of the Tax Code. ... Once a small business corporation properly and timely elects to be treated as an S corp, however, the election remains valid and does not need to be made every year , even if new shareholders do not consent.
Can an LLC file as an S Corp?
By default, LLCs with more than one member are treated as partnerships and taxed under Subchapter K of the Internal Revenue Code. ... And, once it has elected to be taxed as a corporation, an LLC can file a Form 2553 , Election by a Small Business Corporation, to elect tax treatment as an S corporation.
What is considered a late S Corp election?
The entity has reasonable cause for its failure to make the election timely ; The entity and all shareholders reported their income consistent with an S corporation election in effect for the year the election should have been made and all subsequent years; and.
What happens if you file S Corp taxes late?
When S corporations fail to file Form 1120S by the due date or by the extended due date, the IRS will impose a minimum penalty of $205 for each month or part of the month the return is late multiplied by the number of shareholders .
How late can I elect S corp status?
If you would like to file for election in a timely manner, allowing your corporation to file taxes as an S-Corp for its current tax year, you must: File Form 2553 within two months and 15 days of the beginning of your fiscal year. File within 2 months and 15 days of incorporation, if it is newly formed.
