Filing Form 2553 Deadlines and Instructions
Form 2553 will be filed within 3 years and 75 days of the date entered on line E of Form 2553. The IRS provides form 2553 filing instructions to help you complete and file the document. Once you finish the form and other documents to create a corporation, the IRS would approve whether your business could operate as an S Corporation. Additionally, the purpose of Form 2553 is to allow small businesses to register as an S corporation instead of a C corporation.
Form 2553 Overview and Requirements
Sole proprietorships, limited liability companies, & partnerships do not need to file Form 2553. A corporation that meets requirements must also provide statements from all shareholders. Form 2553 sets up your business for federal taxation purposes but does not exempt you from paying FICA and FUTA taxes on your earnings.
Form 2553 Filing Details
Form 2553 is a four-page document. Every shareholder must sign it and describe their ownership percentage. Part one of the form requires information about the corporation and the tax year that the election should take place. The entity’s name, address, Employer Identification Number (EIN), date of incorporation, state of incorporation, names and addresses of all owners/shareholders with their Social Security Numbers, and a signed and dated consent statement must be included. The form must be filed by the 15th day of the third month of the company’s fiscal year to apply for the current tax year.
S Corp Conversion for Sole Proprietors
A sole proprietor cannot directly change to an S corp. Instead, the owner must first form either an LLC or a C corp and then elect S corp status with the IRS.