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Returning Member
posted Feb 2, 2022 11:24:06 AM

How late can you file a form 2553 S-Corp Election ?

I set up my business as a PLLC beginning of 2021.  I ended up make much more than I anticipated throughout the year.  Mainly in the 4th quarter.  Fear I'm going to owe a lot of self-employment tax.  I know you can file for a late election within the same tax year, but can I file still in 2022?  I have no employees and haven't paid myself a paycheck in 2021.  Just did draws, so don't know how that will affect things.  Seems to me it won't change my taxes owed, since I didn't pay in any payroll taxes or take dividends.  Never got a FEIN either since I didn't do any payroll.  Anything I can do?

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2 Replies
Level 15
Feb 2, 2022 11:41:10 AM

@lori-schultz wrote:

.....haven't paid myself a paycheck in 2021.  Just did draws, so don't know how that will affect things.  Seems to me it won't change my taxes owed, since I didn't pay in any payroll taxes....

That is going to be a huge problem and there is not much you can do, that would be cost-effective, at this point.

Level 13
Feb 2, 2022 2:06:04 PM

A few comments on your situation:

  • First and foremost, I recommend you consult with a tax professional where you can have a one on one and discuss your facts.  A forum such as this is not conducive for these fact intensive situations.
  • Your discussion may conclude that you don't attempt to make a late S election.
  • Since you didn't pay yourself any wages, it may be in your best interest to remain a single PLLC for 2021.  Not paying yourself any wages as an S corp owner is a hot area for the IRS.
  • You also mention that you didn't get an EIN.  This is a must in order to make an S election.
  • You indicate that you didn't "take any dividends".  Not sure what you are thinking here, but those "draws" will be treated as distributions by the IRS, and as such, would be treated the same way on your S corp return; assuming you go that route.
  • Finally, you should not be filing any S corporation tax return until you receive an approval letter from the IRS.
  • As you can see, there are many issues and decisions to make.  These should be made with some good professional advice.