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S Corp Election for llc Form: What You Should Know

The S Corp Election (Form 2553) provides to you a way that you can apply a different form of corporate income tax on your LLC income, and you will be taxed as an S Corp under the laws of your state of incorporation. As you can see from the form, Form 2553, if you live in Texas, your LLC will pay federal tax as an S corporation, and state tax as an LLC. If you live in Alabama, Nevada, Utah or Wyoming, your LLC will pay federal tax as an LLC, and state tax as an S Corp. If your LLC has more than one person, you will be required to file Form 2553 for them to be considered one corporation. (You can click here and select “View All Forms” to view a list of the tax forms for each person.) If the person filing Form 2553 is a partner or an officer of your LLC, then you'll need to file Form 2553 for each partner or officer. Step One: Obtain a Copy of the Notice You Received When You Filed for the New LLC After you file Form 2553 and fill out all the information, including the designation of your LLC for federal tax purposes, you may want to look for the official notice. Use the link from your last filing notice to see if there is a notice for you. If not, then check with the IRS and see if there can be an official notice from the IRS (which you can download here). If there is, then the IRS will release you the list of other people who will be considered a person and can file Form 2553. If not, then you will have to wait until you file your Form 2553 to learn who the other people who will be considered a person. If the IRS does send you a list of other people (which will never happen if you file your 2553), then use the information in this document to fill out the Form 2553 from your own list of other people. (We recommend using the table on page 13 of Publication 726) If you do not receive a list of other people and can't get the IRS to release you the list by filling out an official statement, then the list you obtained from your previous company will serve as your official list of persons who can file an S corporation tax election.

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Instructions and Help about S Corp Election for llc

Hey Mark Kohler here and I got an important topic to talk about do you have children you own a small business do you think you can integrate the two of those and save a ton in taxes and maybe teach your kids about entrepreneurship at the same time well we got to talk about putting your kids on payroll I got my white board here we're gonna break down and you're gonna love it Music now before I go to the whiteboard let me make a few important points first this is legitimate it's legitimate if you truly have job duties for your children and they are participating in the business not just washing dishes and cleaning the room and that you could document things like janitorial shredding paper stuffing envelopes helping at the worksite even you know just running errands so this is a very important tax strategy if you treat it legitimately I don't want this to be some sort of tax scam or sham now this has been on the books for years this is a very common strategy think of the New York City Deli paying their kids working behind the counter even eighty years ago or in the Oklahoma City Farm paying their kids on the farm in the summer and this could be you and your real estate or internet business help having your kids help you around the office so make sure you have clear duties legitimate services your kids are providing and paying them a fair amount which is another topic which I want to give out of the way is that you're not gonna pay a five-year-old you know several thousand dollars to help in the business maybe it's $100 a month to a six or seven year old to...

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FAQ - S Corp Election for llc

Can an LLC file form 2553?
An LLC that is eligible to elect S status and timely files an S election (Form 2553, Election by a Small Business Corporation) is considered to have made the election to be taxed as a corporation (Regs. Sec. 301. 7701-3(c)(1)(v)(C)).
What are the advantage of electing S corporation status?
Asset protection. One major advantage of an S corporation is that it provides owners limited liability protection, regardless of its tax status. Limited liability protection means that the owners' personal assets are shielded from the claims of business creditors 14whether the claims arise from contracts or litigation.
Why would an LLC make an S corp election?
Although being taxed like an S corporation is probably chosen the least often by small business owners, it is an option. For some LLCs and their owners, this can actually provide a tax savings, particularly if the LLC operates an active trade or business and the payroll taxes on the owner or owners is high.
How do you add an S corp to an LLC?
An LLC can choose to be treated as an S corporation in a two-step process. File a Form 8832, Entity Classification Election. This causes the business to be taxed as a C corporation. Then file a Form 2553 to elect an S corporation tax structure.
Can an LLC file for S corp election without filing 8832?
Electing Corporation vs. To elect Corporation status, the LLC must file IRS Form 8832 - Entity Classification Election. To elect S Corporation status, the LLC must file IRS Form 2553 - Election by a Small Business Corporation. 2\ufeff
Is an S Corp an LLC?
An S-corp is not a business entity like an LLC, sole proprietorship, partnership or corporation. Rather, it's an elected method of determining the way your business will be taxed.
Why would someone choose to operate as an S corporation rather than a partnership?
Personal Asset Protection If the company incurs a debt or is sued, the partner's personal assets are at risk to pay off any claim. An S corporation is a separate legal entity. The shareholders' personal assets normally cannot be seized to pay off any debts or claims held against the corporation.
Which entity is eligible for S election?
Deemed election to be treated as a corporation An LLC that is eligible to elect S status and timely files an S election (Form 2553, Election by a Small Business Corporation) is considered to have made the election to be taxed as a corporation (Regs. Sec. 301.
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