Form 2553 is an election used to have a business entity recognized as an S corporation for tax purposes—from incorporating to filing—all within deadline or with “reasonable cause”. Learn more about what is required for businesses to make this election with the IRS.
What is Form 2553?
Form 2553 is an IRS election form that allows businesses to elect to be classified as an S Corporation, rather than a C Corporation, and thus be subject to various tax benefits. In order to be eligible to make an election with Form 2553, the business must meet the IRS’s criteria, such as having less than 100 qualifying shareholders and only one class of stock making up the company. After filling out the form, it should be submitted to the IRS following their detailed guidance on where to mail or fax it based on the state in which the corporation is located. In some cases, the form may be filed late under certain circumstances, with the “reasonable cause” statement and required representations accompanying it. Additionally, certain other non-corporate tax entities must submit Form 8832. It is important to seek professional assistance when filing S Corporation election forms to ensure accuracy and compliance.
IRS Form 2553 – Who Needs to Fill It Out?
IRS Form 2553 is used to elect S corp status with the Internal Revenue Service, allowing a business entity to be taxed as an S corporation for tax purposes instead of a C corporation. Eligibility requirements include being a domestic corporation with no more than 100 qualifying shareholders and only one class of stock. To fill out Form 2553, help from a tax professional is recommended due to its complexity. It must be filed before the 16th day of the third month of the corporation’s tax year, but can be filed later with reasonable cause. Other business entities like a single-member LLC must also file Form 8832.
Step-by-Step: Form 2553 Instructions For Filling Out the Document
To make an election to the Internal Revenue Service to have your business treated as an S Corp for tax purposes, you must fill out IRS Form 2553. You must first incorporate your business by fulfilling all legal requirements, then provide general information (e.g. EIN, date of election) and identifying info for each shareholder in Part I. You can skip Parts II-IV if you don’t need them. You must mail or fax the form to the IRS as e-filing isn’t available. Late filing is possible, but you must prove “reasonable cause” and adhere to specific regulations. Other business entities must also fill out Form 8832.
Below, we present a table that will help you understand how to fill out Form 2553.
| Information for Electing S Corp Status | Details |
|---|---|
| Form Required | IRS Form 2553 |
| Business Incorporation | Fulfill all legal requirements |
| General Information | Provide EIN and date of election in Part I |
| Shareholder Information | Provide identifying info for each shareholder in Part I |
| Skip Parts II-IV | If not needed |
| Filing Method | Mail or fax, as e-filing isn’t available |
| Late Filing | Possible with “reasonable cause” and specific regulations |
| Other Business Entities | Must also fill out Form 8832 |
Do You Need to File Form 2553 Each Year?
Businesses looking to elect S corp status must file IRS Form 2553 to the IRS with the required information. The form must be sent before the 16th day of the third month of the corporation’s tax year, or before the 15th day of the second month of a tax year if the tax year is 2½ months or less. If the form is filed late, business entities must provide a reasonable cause statement and form 8832 as well. Additionally, shareholders must sign the form to complete the election. It is recommended to seek the help of a tax professional to ensure that the form is properly filled out.
Download the official IRS Form 2553 PDF
On the official IRS website, you will find a link to download IRS Form 2553. However, to make it easier for you, we are providing the link in our article, which come directly from the official irs.gov website! Click to download: IRS Form 2553
Sources:
https://www.irs.gov/forms-pubs/about-form-2553
https://www.irs.gov/instructions/i2553
