How Do I Form an S Corporation? - All Up In Yo' Business

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I’ve posted videos in the past discussing S Corps and the benefits of forming an S Corp, but this question still comes up: how do I form an S Corp? Once you have formed your business and decide that you want your business to be taxed as an S Corp, how do you actually do that?

If you have created an LLC for your business and you want it to be taxed as an S Corp, you will file IRS Form 2553. The form asks for some basic information about the business and it's owners, and is generally pretty straight-forward.

The important thing to remember if you want to form an S Corp is that there is a deadline for submitting Form 2553 to the IRS. If you just formed your business, you have two months and 15 days from the date of formation to form the S Corp for the current year. If you are already passed that window, then you have 2 and a half months from the beginning of the next year to be taxed as an S Corp for that next year.

That may sound confusing, so let me paint you a picture. Let’s say you formed your business on April 1, 2015. If you file Form 2553 within two and a half months, your business will be taxed as an S Corp for all of 2015. If you file Form 2553 after that 2 1/2 month window, the business won't be taxed as an S Corp until 2016. Alternatively, let's pretend you formed your business in 2014 and didn't want to be taxed as an S Corp at that point. You met with your CPA on August 1, 2015 and she recommended that the business switch to an S Corp. If you file Form 2553 by March 15, 2016, your business will be taxed as an S Corp beginning in 2016. But if you wait and don’t get around to filing the form until April 1, 2016, then your S Corp election will not take effect until 2017.

The IRS will make some exceptions and still accept late filings, but those exceptions are limited.

Once you have the form complete you just fax or mail it to the IRS. Assuming nothing goes wrong, in a month or two they will send you a confirmation saying that your tax status has changed and you are now an S Corp. Success!

Really, that’s it. It's not as complicated as it sounds, I swear! It is still definitely a good idea to talk with your attorney or your CPA when doing this or simply have them take care of it for you. As simple as it is, it is still possible to mess it up or not accurately complete Form 2553, and dealing with the IRS is not always the most fun experience. (You can usually expect at least an hour hold time if you need to call the IRS with questions.) So, it’s definitely better to be safe rather than be sorry and just have a professional take care of it for you.


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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by 180 Law Co. LLC, with its principal office located at 1580 N. Logan St., Ste 660, PMB 92925, Denver, CO 80203. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with 180 Law Co. LLC or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.

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[socomhellboy]

Hi Ms Aiden! My question as follow: I registered my LLC with the state and now I'm ready for my EIN but it seems like when it comes to choosing at the IRS states that by default you get LLC status unless otherwise you pick "S-Corp" so can I pick S-Corp status from the very moment I apply for my EIN? Or do I have start as an LLC and then apply for S-Corp afterword?

[mairoom]

can i initially start my buisness as an scorp, as soon as i create my buisnees? or is there a waiting period?

[abelara]

I filed today (11/14/18) to start a new LLC business in my state (Arkansas) with a future effective date of 1/1/19. Once I got email confirmation from the state I also applied for an EIN today with a business start date of Jan 2019. My question is, can I fill out form 2553 today, or do I need to wait until Jan 1st??

[elizabethsolla]

Thank you Aiden-I have an LLC established under educational consulting-however my eBay reselling account has blown up. Can I change my business description to retail to keep the LLC I already have established and just add DBA the eBay store name?

[sergiocurioso]

Hi Mrs. Aiden, ESQ do you know how to transfer a Corporation to another owner? I’m in California :)

[LaserJet]

I saw your videos, they are simple but accurate, thank you for sharing your knowledge.


Hi, I have an EIN, for a business that I just to have. just last week I filed for C Corp in CA.
should I apply for another EIN after canceling the old one, then convert my C Corp to S Corp?
if I apply for the new EIN, will I be able to use it for S Corp.?

[nenethompson]

May I request S corp taxation if I am a single member LLC? Thanks for your help.

[socomhellboy]

Question? Can you get your second EIN under your first EIN? Under the father company EIN?

[pierreaccounting]

Thank you so much for that video! I just had a client ask me to file this for them. Your video made it simple for me to explain to my client on how to file this and helps me figure out how to bill her for these services. Keep pumping out these videos Aiden!

Sincerely,
#YourFavoriteCPA

[indignorhousepublishing]

Real easy. I did and took me a few hours and $175. All by myself. Duh. One SSC form, payment, creat bylaws, 1 hour, and the tax forms. Done!

[joshuafrench]

Hi Aiden, I have a couple questions. Im going to start an S corp that deals with stuff like stock trading, but I also want to buy real estate. I was wondering if you think it would be a good idea to start a company for each type of investment? I heard somewhere that real estate would be better owned under an LLC. Also, would I be double taxed if my S Corp owns my Real estate holding LLC? Thanks

[marketbuy]

Hello. Today is April 5th, 2020. I’m doing my 2019 tax return now. I’m a Single LLC. Is it too late to file for S-Corp tax return for 2019 if I submit Form2553 to the IRS? What are the odds of having it approved by the IRS for my 2019 S-Corp filing? Is Form 2553 the only FORM to submit? What about 8823? Thank you

[ChrisLoneWalker]

If I elect to be taxed as an S-Corp, does that mean I changed from an LLC to an S-Corp or does that mean I'm only an S-Corp for tax purposes and an LLC for everything else?

[carle]

if a elect to become an S CORP today march 7 and send the form, i’ll be able to be tax as an Scorp from the beginning of the year? how about if you are elected to be an S CORP from June? how do i taxed the months from january to may?

[mds]

I am a owner operator/independent contractor truck driver. I have an llc. Would it be wise to be taxed as an s Corp ?

[Rezakhor]

Question: I just formed an LLC. Does the ending of my business name go from LLC to Corp? Do I have to dissolve my name and start all over? Not sure exactly. Thanks for helping.

[HJBProductionsLLC]

So you first have to register as LLC before requesting an s corp tax status?

[ksevette]

The IRS is asking me for share holders information to be elected as a S Corporation. I have no share holders. Any advice?

[CashNYC]

I'm a single member LLC this was something I've been thinking to do for my trucking business. I started my business in march 2016 u think its too late to file that 2583 form now?

[hiatuz]

who else is reading comments while ads are playing? -.-y