In regards to filing in a community property state, does the other spouse still have to sign as a consenting spouse in Part 1 Section J-N even if only one spouse is listed as the sole member of the SMLLC?
I Originally opened a company as a Sole Proprietor LLC back in Sept 2021. I want to change to S Corp to file 2022 taxes as such. On "line E" do I put Jan 1, 2022, Today's date, or still use the date I opened the Company which was Sept 2021?
The election can only be made for a legal entity. Sole proprietors are operating a business without a legal entity. You'll need to form a domestic entity and apply for a new EIN for that entity before filing the Form 2553.
If filing late election relief, how do you classify/reclassify distributions already paid to yourself as W2 wages instead, since payroll has not yet been setup?
Hello Knott. If I have a LLC single member but I want to be treated as S corp, do I need to fill out Form 8832 and Form 2553? In other words you have apply for C corp first and then apply for S corp? How is the right path to do it?
You only need to file the Form 2553 for the LLC. Filing the form is a deemed C corporation election with a subsequent S election, so there is no need to separately file the Form 8832.
Could I clarify, can an LLC that's been filing as a sole proprietor for say four years then switch to an s corp starting in the fifth year? Or is the idea you have to make the change right away with three years being the limit?
Hi Jason. Thank you for the awesome video. Quick question. Can a single member LLC elect S Corporation status with two shareholders? I am currently a single member llc and want to have two shareholders when I elect S status. Is that possible? Thank you!
@@JasonDKnottokay, so I would add a member to my LLC before making the S election on Form 2553? Is there a way to avoid this by having the other shareholder buy in or obtain an ownership percentage right after my S corporation election takes place?
What is the steps for converting LLC to Scorp after submiting form 2553 to IRS? I am a single owner of my LLC and want to wave the notice of the shareholders, create the stock ledger and the corp book, etc. I would appreciate if you can advise me.
You can still keep the LLC under state law. The S corporation election merely changes the way it is taxed for federal tax purposes, so once the Form 2553 is filed and accepted, you have an S corporation.
Great info Jason - thank you! Question: When mailing the paperwork to the IRS, do you include pages that were left blank (ex. parts 2-4)? Also, I have heard some people will both mail and fax simultaneously. Is this advised?
So I did my form 2553 about 2 Weeks ago and Mailed it to the place where it’s supposed to go. How do I know weather I got approved and I’m an S Corporation?
It normally takes 2 months to receive a confirmation from the IRS. If you haven't received a confirmation after that point, you can call the IRS and a representative can let you know whether the election was approved
A multi member LLC is by default a partnership for federal tax purposes. If every owner of the LLC is an eligible shareholder, the LLC can file the S corporation election.
Thanks for watching! A late filed Form 2553 is filed more than 2 months and 15 days after the desired effective date you want the election to start. For example, if you want an election to be effective March 1, 2022, you will need to file the Form 2553 within 2 months and 15 after March 1, 2022. If you file beyond the 2 months and 15 days with that desired effective date, the election is late.
Why didnt you follow the "C/O" rule for the addresses being the same as someone else's in Part I of the instructions for filling out the form? The rule from the IRS website says: "If the corporation's (entity’s) mailing address is the same as someone else's, such as a shareholder's, enter "C/O" and this person's name following the name of the corporation (entity)"
You can put C/O if you would like, but there is no detriment to filling out the complete address. The IRS processes these documents by hand, so in my opinion, make it as error proof as possible by providing the complete address for each and every party listed on the form.
