LLC as SCorp for 2024

[scsvel]

Hi all - 

I am an independent contractor and working with a single member LLC (SMLLC) registered in PA. I worked for 10 months in 2024 with this SMLLC but didn't elect to be taxed as SCorp yet. Just collected the money from the client to my personal account and been paying some estimated taxes.
So my question is Can I file taxes for 2024 by electing to be taxed as SCorp now?

If yes,
1. do I need to have a separate business account
2. Can I run payroll for me as an employee for 2024 now and generate W2 and K1 for distribution

Basically, I would like to understand if it's possible to file as SCorp for 2024 now even I didn't do anything yet. Thanks in advance.

[ThomasM125]

Yes, in general, you can file as an S Corporation in 2024 by filing a late S corporation election in most instances, provided it is not more than three years and 75 days past the original election due date. You can read more about the qualification in this IRS article. You will see on option on the election Form 2553 to enter an explanation as to why your election was late:

You should have a separate business account for the corporation, but it is not critical. You can still prepare a W-2 form and pay in payroll taxes for 2024, but it will be late and subject to penalties and interest.

[scsvel]

@ThomasM125  Thanks for the details. 

One more related question - Do I need to generate monthly paystubs or just a W-2 and K-1 generation at the end of year is enough for SCorp in my case (SMLLC)?

[Mike9241]

if you take distributions without taking a salary around the same time, the IRS could recast that distributions as salary and then your S-corp and maybe even you would be subject to all sorts of penalties.

[AmeliesUncle]

It sounds like the LLC had not "intended to be classified as an S corporation" for 2024.  If that is the case, it does not qualify for the late election for 2024.  The S-election would need to start in 2025.

However, you may want to make sure you know the pros and cons of the S-election.  Many people don't fully think it through and the S-election may not be in your best interest.

https://www.irs.gov/instructions/i2553#idm[phone number removed]128