How To Register Llc As S Corp
The form 8832 is also filed to change the llc s entity classification.
How to register llc as s corp. To file for s corporation treatment you ll need to file form 2553 with the irs. If you register an llc and choose to be taxed as an s corporation you must report your earnings on your personal income tax return. An llc is not a corporation even if the irs recognizes it as an s corporation for tax purposes. An llc that is taxed as a sole proprietorship still offers limited liability protection. An experienced corporate or tax lawyer can help the s corp.
Paying s corp taxes as an llc an llc that elects s status must file form 1120s u s. In order to be taxed as an s corporation the llc must file form 255 3. In order for the entity to be changed from an llc to a corporation the business will need to file with the state agency who is in charge of corporate filings. However they are legally still llcs. A regular c corporation is taxed twice one tax at the corporate level on the corporation s net income and then a second tax when profits are distributed to shareholders.
Forming a limited liability company requires registering your business with the state and filing articles of organization. An llc may file taxes as s corp by completing and filing form 255 3 election by a small business corporation. You can choose to be taxed as a c corporation or as an s corporation. Income tax return for an s corporation. When these llcs meet the criteria for filing as an s corp they can file taxes as an s corp.
An llc or limited liability company is a business formed under the tenets of state law. You can avoid this double taxation by electing to become an s corporation. Although many llc s choose to go with the default tax format there are some tax benefits available if you choose the s corporation. The s corporation must choose a name for the new llc and confirm that it s available in the state of formation. Thus an llc with multiple owners can either accept its default classification as a partnership or file form 8832 to elect to be classified as an association taxable as a corporation.
Determine the best state in which to form the new llc. Once the llc is formed choosing how your business is to be taxed is performed by filing an election document form 2553 with the irs. Payments or distributions to members of the llc will be included as compensation to officers in the section for deductions. It s relatively simple paperwork but there are strict deadlines for when it needs to be filed. Form 1120s is the form used by s corporations to report corporate income.