How to Switch Your LLC to an S Corp

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*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.

#taxes #taxfreeliving #taxexpert #taxreduction #llc

#taxes #taxfreeliving #taxexpert #taxreduction

How to Switch Your LLC to an S Corp:

Switching your LLC to an S-Corp can be beneficial because it can save you a truly significant amount of money in self-employment taxes. A lot of LLC owners make the switch once their businesses have grown large enough to the point where they will save thousands or tens of thousands of dollars in taxes per year by making the switch.

The process of switching to an S-Corp from an LLC is relatively straightforward, but it has to be done on time. To switch from an LLC to an S-Corp, you have to correctly fill out Form 2553 and submit it with all the required signatures by March 15th of the calendar year you want to make the change for.

If you miss this deadline, there is still a chance you can have your S-Corp election approved, but it is not guaranteed. If you miss the deadline, you can still file Form 2553, but you will have to write “FILED PURSUANT to REV. PROC. 2013-30.” at the top of the form and you must adhere to all of the other late filling rules. For example, there needs to be a good reason why you are filing this form late.

If the IRS approves your late S-Corp election, then you will be able to have your business taxed as an S-Corp for that year. If not, then you will most likely have to keep your LLC status for that year, but you can try to change it again in the future.

Watch this video to avoid overpaying to Uncle Sam and to get educated on how to leverage the tax code!

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*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.

[LimaFoxtrot]

I think there's a bunch of confusion here and I haven't really heard you address it. There's two ways you can do this: (1) just become an s-corp or (2) keep your LLC status AND elect to be taxed as an s-corp. People are asking about EIN's -- An LLC that already has an EIN chooses to be taxed as a corporation or as an S corporation does not need a new EIN.

[it]

So EXTREMELY grateful to have people like you on here educating the "little man"! Thank you so much for the time and effort involved to help us out!!

[KingDavid]

Karlton, you’re the GOAT of tax strategy. I’ve learned more from your videos in 4 months than 4 years of undergrad as an Accounting major. Thanks for sharing this valuable information!

[lyleanderson]

Your videos are gold! Your energy and intelligence are so well matched and the presentation helps me digest the information easily. Thank you and I'll keep watching for more content!

[middleofnowhereradio]

Fantastic communication. You made the approach less intimidating. As a creative, my brain doesn't work well with all this stuff, I much rather spend time creating. Your channel has helped me become a better business owner. Thank you!

[yayataya]

Hello Karlton . I'm following you for almost 6 months now and I'm still out of the USA and i really learned so much about taxes so thank you so much, I'd like to come and meet you in real and tell you about my business to from the begging .. please remember this comment so you remember me when i schedule a call with you before meeting. thank you again

[ajf]

Why the stress on "Filing 2553 on 16 years I think I've filed 5-10 on time; compared to 200+ late. Rev Proc 2013-30 is rejected - even if it is; you can call...if you write the proper explanation. I used to say "the admin forgot" - even better "the information needed wasnt available by deadline. Entity acted as an S Corp since 1/1"....100% success rate

Edit: CPA [CA/NJ]

[tradergang]

Karlton is literately one of the best tax professionals, I will be for sure using one of his services in the future.

[Ilumenaughty]

Your videos have really cleared up so much confusion on how money works. I would love to see a video on *when to swap from an LLC to an S Corp. Because on its face from your How to pay yourself from an LLC video, it looks like you should just start out as an S Corp, but I know that’s not always the case. Thanks! Looking forward to binge watching your vids all day.

[neciabunnell]

Super helpful information! Got straight to the main points of this process!!

[levont.husser]

Great information. I will be making the switch too.

[prismjiujitsu]

Truly appreciate the info I’ve gotten from this channel

[jackie]

Thank you so much for this information, I'm so sorry I let Legal Zoom help me, They never educated me on the pros and cons of an LLC

[stayready]

I registered my LLC in October 2022 and am filing my Form2553 now in January 2023. Do I have to write anything in the explanation since my LLC was the previous year? No revenue was made and won’t be made for 2 more months.

[alexisjohnson]

Thank you, Karlton. Question: can an S Corp own an LLC or multiple LLC's? If so, can this be done in real estate investing?

[akams]

Great video. However, fot $900/ hr of your consulting, why/how are you a better option than Mama Karla or a lawfirm/financial planner company?

Pls convince as I'm trying to determine who best to go with urgently.

[capstonepaymentsolutions-g]

Thank you for this information. Very valuable.

[comingtofull-ageinchrist]

Karlton Dennis, I don't understand the part about less than 3 years and 75 days must have passed since the effective date of the election when you are filing an S-Election for an S Corp after March 15th. I understand the shareholders having reported their income consistently with an S-Election for a S-Corp, but does the 3 years and 75 days have to do with filing after March 15. Okay, so you show reasonable cause, great, and you and all shareholders having reported their income consistently with the S-Election for an S-Corp, great, but I'm not understanding the 3 years and 75 days? Less than 3 years and 75 days have passed since the effective date of the Election? What does that have to do with being accepted when you file late? Thanks!

[elviraceasar]

Your so kind! Thank you for the information

[achexo]

Thank you for the expert advices that you feed us for free. Is it a good idea to form an LLC with "S CORPORATION ELECTION WITH THE IRS"? they say that makes the LLC to be taxed as an S Corp.