Last day to elect S Corp

[stech]

I created an LLC on 10/02/22.

can I elect S Corp for 2022 & 2023 taxes?

I have yet to submit form 2553

[ThomasM125]

It is too late to make a timely S Corporation election, but you may be able to make a late election. The basic requirements are that it is less than three years and 75 days from the original election date, that all income has been reported as if the election had been made, the entity intended to be classified as an S Corporation and there was reasonable cause for its failure to timely file the election on Form 2553. This is from the IRS:

You can read more here:  S Corporation election

[Mike9241]

The IRS will only approve the late election if you have reasonable cause which must be stated on the 2553.

"that all income has been reported as if the election had been made" do you meet this specification? 

The phrase “that all income has been reported as if the election had been made” refers to a situation where an entity or individual has consistently reported their income as if they had already made a specific election or choice. Specifically, it applies to cases where an election (such as an S corporation election) was not filed in a timely manner, but all income was reported as if the election had been made. (i would take this to mean an S-Corp return was filed) 

For example, in the context of an S corporation election, if a business entity failed to file the ap.... This ensures that tax reporting remains consistent even if the formal election process was delayed.

In summary, the phrase emphasizes that despite any administrative delays or oversights, income reporting has been handled as if the desired election had been properly made. It helps maintain consistency in tax treatment even when the formal paperwork was not filed within the required timeframe.

I think you should get professional advice on making a late election so you know all the pros and cons or even if it can be done because of inconsistent reporting for 2022 (schedule C vs K-1). There's the failure to file the return, failure to take a reasonable salary. 

Others may have a different opinion. 

[stech]

What about election for 2024 tax year?

I am not understanding the late filing “all income has been reported as if the election had been made”

doesn’t income get reported the same? Or is it referring to owners salary draws? Which I know in S Corp is required and in an LLC is not. 

[RobertB4444]

For 2024 you still have plenty of time.  Submit the 2553.

“All income has been reported as if the election had been made” just means that you should do the return as though the S-election were approved and pay taxes at the stockholder level and pay a salary to the owner and all of the fun.

@stech 

[stech]

What does it mean “pay taxes at the stockholder level and pay a salary to the owner”

I paid salary to owner. What does it mean to pay taxes? I didn’t make any estimated taxes. And I didn’t file my personal 1040 for 2022-2023. So does it mean paying taxes at 1040. 

[stech]

Also reason there where no estimated tax paid, because we had losses 

[DavidD66]

What is meant by "pay taxes at the stockholder level..." means the S-Corp business is a Pass Through Entity.  It does not pay federal income tax on its profits.  Instead, the profits (or losses) are reported to the owners on Form K-1, which the owners report on their personal tax returns.  Income from the K-1 is included in the owner's taxable income on Form 1040.  The owner is responsible for making estimated taxes if necessary.  I recommend you file your business taxes and your personal taxes for 2022 as soon as possible.  As for paying the owner a salary, when the S-Corp makes a profit, the company is required to pay the owners that work in the business a reasonable salary.  You are not just an S-Corp owner if you provide services to the business, you are an employee and have to treat yourself as an employee, which means paying yourself a reasonable salary.  Form more information see the following IRS web page:  Reasonable Compensation