Subchapter S Election for a LLC

Forum|Forum|6 years ago
March 11, 2020
1 reply
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I am a single LLC, one person and have always filed Schedule C. I received a large payment last year 2019 and have been advised a Sub Chapter S election may help me pay less tax as self-employment is not taxed the same on the schedule S as the schedule C.

I am really confused as to : Is this a tax advantage? What form would I use and when is it due?

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Best answer by Anonymous_

With an S corporation election, you would have been required to have paid yourself a reasonable salary last year and it is too late for that to be accomplished (i.e., there was not withholding for income tax and FICA).

In addition, there are filing deadlines (the relevant form is Form 2553) and it does not appear as if you would meet them to elect for last year.

See https://www.irs.gov/instructions/i2553#idm139773190567344

With respect to late elections, it does not appear as if you would qualify for that either.

https://www.irs.gov/pub/irs-drop/rp-13-30.pdf

Anonymous_Answer

Level 15

In addition, there are filing deadlines (the relevant form is Form 2553) and it does not appear as if you would meet them to elect for last year.

See https://www.irs.gov/instructions/i2553#idm139773190567344

With respect to late elections, it does not appear as if you would qualify for that either.

https://www.irs.gov/pub/irs-drop/rp-13-30.pdf

catcoleAuthor

Level 2

Thank you, for your information.

I am not a Subchapter S, not do I want to be. I only want the tax status election to file my taxes. Is this the same answer? What is the 8832? Is this what an LLC would use to change tax status?

Anonymous_

Level 15

@catcole wrote:

Is this the same answer?

Yes, the answer is the same. Form 2553 would be used to make an election for your LLC to be treated as an S corporation for federal income tax purposes.

@catcole wrote:
What is the 8832? Is this what an LLC would use to change tax status?

For your purposes, Form 8832 would be filed if you wanted to elect to have your LLC treated as a C corporation for federal income tax purposes (a result you most likely would not want).