LLC as S Corp treatment

[stech]

I opened as LLC. I want it to be taxed as S Corp. Do I need to do I additional filing? And when is that form required 

I read it here https://turbotax.intuit.com/tax-tips/small-business-taxes/can-i-convert-my-llc-to-an-s-corp-when-fil...

that I can file 2553 at the time of filling  but I thought when I opened my LLC, I must file another form to let IRS know that I will be treating my LLC as s corp for tax purposes. So this is not correct?

[tagteam · Accepted solution]

You would only need to file Form 2553 and the rules for when to make the election can be found in the IRS instructions for that form.

See https://www.irs.gov/instructions/i2553#idm139855003794080

[Critter-3]

Did you apply for an EIN ?    When you did you would have told the IRS that you wanted to be incorporated and that you would make the S-Corp election ... the instructions would be on the acceptance notice telling you what to file and when. 

[stech]

I started LLC this month & EIN. Based on IRS website above, I would need to file 2553 when I file next year for 2023

i have another LLC I opened last year, for which I need to file 2022 taxes. Can I claim that as S Corp?

[Critter-3]

@stech 

The LLC designation is a state situation ONLY.  When you apply for the EIN # from the IRS you will indicate how  the LLC will be taxed so did you indicate that you will treat the LLC as a corporation?   Look at the EIN acceptance notification to see the forms you need to file and when to file them.

[stech]

Here is the text from my EIN letter

When filing tax documents, making payments, or replying to any related correspondence, it is very important that you use your EIN and complete name and address exactly as shown above. Any variation may cause a delay in processing, result in incorrect information in your account, or even cause you to be assigned more than one EIN. If the information is not correct as shown above, please make the correction using the attached tear-off stub and return it to us.
A limited liability company (LLC) may file Form 8832, Entity Classification Election, and elect to be classified as an association taxable as a corporation. If the LLC is eligible to be treated as a corporation that meets certain tests and it will be electing S corporation status, it must timely file Form 2553, Election by a Small Business Corporation. The LLC will be treated as a corporation as of the effective date of the S corporation election and does not need to file Form 8832.
To obtain tax forms and publications, including those referenced in this notice, visit our Web site at www.irs.gov. If you do not have access to the Internet, call [phone number removed] (TTY/TDD [phone number removed]) or visit your local IRS office.

Just to be clear, it will be treated like S Corp. not just  Corp.

I just want to know if I need to take any action now? I thought I needed to tell IRS that my LLC will be S Corp at the time of registration and not when I file taxes?

[Critter-3]

Did you get the EIN as a single member LLC ?   

Does the notice not mention what tax forms need to be filed ... does it mention 940, 941 or 1120 ?

[tagteam]

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@stech wrote:

Just to be clear, it will be treated like S Corp. not just  Corp.

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It will be treated as a C corporation unless you file Form 2553.

[stech]

Are you saying LLC treated like C Corp unless I file 2553?

[tagteam]

Yes

[Critter-3]

YES... that is what the IRS said on the notice and if you did not file an extension then the return is now late and the late filing penalty is accruing.  The S-Corp election is now also late ... please educate yourself here :   https://www.irs.gov/instructions/i2553

[stech]

This says

When To Make the Election

Complete and file Form 2553:

• No more than 2 months and 15 days after the beginning of the tax year the election is to take effect, or

• At any time during the tax year preceding the tax year it is to take effect.

Since I created my LLC May 10, 2023. I must file Form 2553 now before year ends in 2023?

When I file my LLC as S Corp, do I file 1120S?

[Mike9241]

Since I created my LLC May 10, 2023. I must file Form 2553 now before year ends in 2023?

the LLC tax year began 5/10/23 so 2 months 15 days would be on or brfore 7/25/2023. However, to be honest, the IRS is generous in allowing late elections. 

When I file my LLC as S Corp, do I file 1120S? 

for the years the S-Corp election is in effect you file 1120S. That requires Turbotax Business (full Windows PC. - not available for MAC or online) the S-Corp issues a K-1 which then gets reported on your 1040. Are you familiar with the need to take a salary? if not you should discuss the operations of the S-Corp with a tax pro. 

[dmertz]

An  LLC is treated as a corporation only if it files the relevant form (Form 8832 or Form 2553) making the election to be treated as corporation.  Absent such an election, a single-member LLC is a disregarded entity and a multi-member LLC is treated as a partnership.

https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-compan...

[stech]

Thanks

yes I’m familiar with 1120S and salary requirement. That’s why I wanted to file as S Corp for tax purposes