How to file a LATE S Corp Election by completing Form 2553
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- Опубліковано 20 чер 2024
- In this video I show you how to prepare and file a late S Corp election using Form 2553. I'll walk you through the form step by step and give you some insights on things to keep in mind when executing the late S corporation "strategy". Please, and I can’t stress this enough, watch this particular video in its entirety because I’m going to cover some important details after I show you how to complete the form.
IMPORTANT: If you live in a Community Property State, your spouse is required to be listed on Page 2, Part 1. The recommended process would be to list the consenting spouse (name, address, SSN) as a shareholder on page 2, but next to her name indicate, “consenting spouse.” And in the ownership column then list their individual ownership as 0% or N/A and date acquired as N/A. I don't cover this in this video but I DO cover it in the "How to fill out IRS Form 2553 (Timely)" video which is linked below.
📺 How to file TIMELY S Corp election video: • How to Fill out IRS Fo...
IRS Form 2553: www.irs.gov/pub/irs-pdf/f2553...
IRS Form 2553 Instructions: www.irs.gov/instructions/i2553
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IMPORTANT: If you live in a Community Property State, your spouse is required to be listed on Page 2, Part 1. The recommended process would be to list the consenting spouse (name, address, SSN) as a shareholder on page 2, but next to her name indicate, “consenting spouse.” And in the ownership column then list their individual ownership as 0% or N/A and date acquired as N/A. I don't cover this in this video but I DO cover it in the "How to fill out IRS Form 2553 (Timely)" video which is linked below.
📺 How to file TIMELY S Corp election video: ua-cam.com/video/TrCNqUKIWlo/v-deo.html
Does this still apply even if only 1 spouse is listed as the sole member of the LLC?
Thank you! I know many who file this form on behalf of their clients and they did not know this.
Thank you! This was very helpful!
I love your detailed explanation. Thanks
Very helpful, better than just the IRS instructions.
Thank you for all this info - very informative!
Thank you very much.
It is very useful information. All what I was looking about the late Scorp election is in this video.
Your UA-cam channel is the best.
That is an excellent explanation. Thank you.
Thanks! I found This on 3/16, glad i wasnt too late
THANK YOU I HATE LOOKING DUMB AT WORK IM A NEW SENIOR.. WHO WAS FIRED AT MY LAST JOB BIT THIS TIME I STUDY MY ASSIGNED PROJECTS AND ASK QUESTIONS THNK YOU !! FOR MAKING ME LOOK LIKE A PRO!! MAY THE ALL MIGHY BELESS YA
Thank you Navi it is a very helpful clip
Very helpful! Thank you
Thanks for the video, you saved me a headache and a good night sleep.
You’re welcome…glad I could help!
Thank you so much, this video is very helpful.
Thank you so much this video was so helpful
@NaviMarajCPA thank you so much. I was clueless of what the 2553 forms are. My final project in my business law class was to choose a business entity to research, prepare, and fill out o file. I was able to follow through on your instructions and was very successful. Thank you for providing guidance as to what documents and resources to look for. I have a clear understanding of what the form is. I plan to watch your "How to File late S Corp..." video
Great 👌😊 video timely watch and you have some important message for timeline updates.
Thank you. Glad you found the video helpful!
Keep up the great work. all your videos are very inciteful and have helped me on my journey as a tax preparer.
great video thanks!
You are awesome!
Great video!
Thanks!
Thank you so much!
Great video thanks
I followed these steps to a T and filed form 2553 4 days late. IT WORKED! I received S-Corp status. I will say that it took the IRS five finger-nail-biting months to send me the approval letter so for those of you filing now, be patient. Thanks so much to Navi, couldn't have done it without your help.
5 months 😢
Thanks!
Thank you.
This was fantastic! According to the instructions, you have 3 years and 75 days to late file...Basically March 15th. I just filed at 3 years and 71 Days. I realized that I didn't write my EIN at the top of the second page of the election. Should I send the packet again? Will they disallow just for that reason?
Hi Navi, thank you for creating this video! I found it to be very informative. I do have a question regarding form 2553 and the date of business formation for an entity. I registered my LLC with the state (Maine) and the business entity was formed on 9/11/23, which was 30 days ago. I haven't generated any revenue/income under this entity yet. If I file form 2553 with the IRS within 75 days of the business formation date, is the S corporation election not considered late? Hopefully my question makes sense. Thank you for your time and providing this information!
Hi Navi, thanks for the great info. My LLC was finalized on 02/28/23. I estimated that my company will make over 90k in profit this year. I learned from one YT video that there was a deadline of March 15 for the S Corp election, but didn't know about the late election. I figured it was just too late to file for this year. Now, since watching your video, It's been less than 75 days since the LLC was finalized. So if I file today, is it not considered late?
Thank you so much! What video did you reference for the solution if we haven't paid ourselves a salary yet?
Great video! Here is my situation, I just learned about S Corp tax benefits at the beginning of April 2023. Have been running a sole proprietor filing schedule C for years. I filed for an LLC on April 05, 2023. Can I still request the late S corp for the tax year 2023, or do I have to wait until next year?
Thank uuu ❤❤❤❤❤
Hi Navi, Thank you for this tutorial. The only thing I had do more research (or wait to the very end for the TIPS)... Initially, as you go over Item E, please inform during that portion of instruction that if we created our entity on Feb 23, 2023... THEN we should elect Feb 23, 2023 as our Date to be effective for this late S Corp election. Is this correct? Thx for all you do Navi!!!
Hi, Navi. Thank you very much for this informative video. I filed 2553 in October. I didn't receive the IRS CP261 until May 23, so I filed a 1065 in March, instead of a 1120S for the year the election was requested. How should I go about submitting the corresponding 1120S? Thanks again for your help.
very useful
Happy to hear that. 👍🏼
Great information. If I set up my LLC on the last day of the year, and received my S Corp election for the last day of that year, can I report all income and deductions for the entire year?
Hey Navi,
Do I need to mail or fax the 2553 even if I already attached it as a PDF to the return?!
Also give me your experience on how long it usually takes to the IRS to respond to an e-filed late election with the 1120-S?
Thanks for the useful video! Do I need to enclose copies of the certificate of organization of LLC while mailing the form 2553? Thank you in advance!
Thank you for the great video. I submitted form 2553 via fax to the IRS yesterday (03/15/2023) but I just realized I made a mistake by putting the effective year as 2024 when I actually wanted it to be effective for 2023. Any idea how I can correct this? Do I just submit another 2553? Thank you!
Navi, this is so helpful but I do have a question if I’m filing 2553 after 2 years after starting MMLLC, so I have to do a late election correct?
This is a GREAT video!! I always like how clear you articulate a complicated tax topic in a clear way. I have 2 questions: If I have an LLC now, I think I also need Form 8832 when late-filing 2553, right? Also, assuming I have all 1120S, late-filing 8832 and late-filing 2553 ready in Feb, do I still need to mail them back as the package, or I can fax them back to IRS? (I know I cannot e-file as I will get rejected since IRS doesn't even know I am an S-Corp yet) Thanks, Navi!
Hey man let me know if you find anything out I’m pretty sure I’m in the same situation as you. Also what is the 8832 for? I just thought I needed to send the 1120s and late 2553
8832 is for LLC to elect as Corporation, which I think it's the pre-requisite for S-Corp but not 100% sure. That's why I asked if Navi can confirm if 2553 can be used by LLC directly without 8832.
Thanks for the feedback - really appreciate it. If you have an LLC (single member or multi member), you only need to file Form 2553 to elect S Corp tax status. Also, the IRS doesn't (currently) accept tax returns via fax so you should send them via regular mail. Some advanced tax prep software will allow you to efile prior to March 15th but you have to click some special options in the tax prep software to say that you are attaching Form 2553 and that it is the 1st year for S Corp filing. You'll want to ask the tax prep software company you are using, if they have that option.
@@NaviMarajCPA Do you mean that "advanced tax prep software" can efile even for late-2553 if it's done before March 15? (by late I mean it's for 2022)
Yes - just need to know which buttons to click within the software, be sure to write the proper words in the top margin of Form 2553 and the 1120s and attach (electronically) Form 2553 to the tax return when filing the 1120s.
Hey Navi, great video and super informative. I formed my LLC in November of 2022 and missed my deadline for S corp election because I wasn’t sure of how profitable I would be. I plan to submit 2553 and 1120-S by mail before march 1st.
My question is should I be filing late election for those two months of 2022 my business was only an LLC? Thanks for any help you can lend
I’m not sure I understand your question fully so I’m hesitant on providing an answer. Can you checkout this video and around the 5 minute mark I think I address your question: WHEN to form your LLC or S Corp?
ua-cam.com/video/wE35rSWMIZc/v-deo.html
Thanks for this information. Question - I incorporated in the state of Indiana but have not relocated and filed in the new state Ohio. Which state would go here?
Hi Navi, your video is very helpful! Quick question, on section J where you list the Name and address of each shareholder or former shareholder required to consent to the election.
Do you list their personal home address or the business address? Thank you!
Home if it's an individual. Business if it's a business.
@17:25 shots fired lol why you gotta blast me like that? 😂
Hi Navi, thank you so much for your informative videos. I am filing a late 2553 for my sons who registered as an S corp on 10/26/22 but failed to mail in the 2553. They were both employed full time elsewhere so did not start actively earning as a company until June/July 2023 which is when we signed up for a payroll company who is taking care of taxes. Should my election be effective 6/1/2023 or 1/7/23? Or is there any reason why I shouldn't begin the S corp filing for this year since it's so late in the year?
Great content! Thank you. I have a prospective client who just told me they want to file as an s corp this tax year (on March 4th) they have nothing in order to do so ( w2 for themself, payroll tax etc) can I go back and create this for 2022 or is it too late?
This video explains what you can do: Didn't issue payroll for your S Corp? Here's what to do. | Reasonable Compensation Workaround
ua-cam.com/video/MoubkgwbTWQ/v-deo.html
Hi Navi, SUPER helpful video, thanks so much. Question: I started my LLC in Sept of 2022. I did not want it to be treated as an S-Corp until January 1 of 2023. I filed my taxes as usual for 2022, no problems there. I wasn't aware of the March 15th deadline and am filing form 2553 now (March 19th) to be effective for 2023 beginning 01/01/2023 (box E). Obviously I won't be filing my tax return for 2023 until 2024. So my questions are A) Am I actually filing late or does the March 15th date not apply to me since I still have a full year ahead of me? B) If I'm not filing late, do I still need FILED PURSUANT TO REV. PROC. 2013-30 at the top of the form? I very much appreciate your help and will be following your videos.
Hi Laura. In your scenario, you’re filing Form 2553 late (75 days past 01/01/2023).
@@NaviMarajCPA Thanks so much!
Hi Navi, excellent video! My accountant filed a late S-Corp election and I still didn't receive the acceptance letter after waiting for 3 months. If it doesn't get approved by the time we file 1120 return, will it get rejected with a reason why?
Thank you. If you or your accountant attempts to e-file the 1120S return prior to the IRS accepting your election. The return will be rejected along with a reason.
I've always file the form 2553 along with the 1120s just because amount of time it takes to get confirmation. My husband didn't receive his s-corp election until a year later. We just filed his return with the 2553 and had no issues 👌
Thank you for this very educational video. One more thing is if I file a late 2553 to apply for s corp then when I would need to start doing payroll for myself? Do I wait for approval of IRS or I start right away after I send the application with date chosen on form 2553? Thank you!
I also have this question
With the help of an attorney, I created an entity May of 2023, (EIN and LLC formed, one member). Two months later, my partner decided that he would join me in the business. Because he is a Veteran, the business would qualify for certain SBA and grant opportunities if I sold him 51% of my LLC, which I did for $10. The same attorney drafted the appropriate documents. So from the legal standpoint we are good to go. The two months from May until I sold 51% to my partner, I contributed funds to the LLC for business set up costs and have continued to contribute funds a needed. We have not received any revenue to date. We want to make the S Corp election. What date should we use, the date I first started started the LLC, May 2023, which would make it a late election, or the day in July 2023 that I sold 51% to my partner? Thanks! P.S. I’m looking for another of your videos to learn about how best to treat the funds I contribute to the business, so I will be reaching out about too.
Hi I really gained a lot of knowledge from this video. But I have a few questions. Can I file back for the past years? I’ve been operating since 2013 and recently just learning that I should have been switched over to a SCorp according to the amount profited.
Quick question: so I checked turbo tax and I saw you can file by mail. Will I be able to just print out the 1120s and attach the late 2553 form with writing on both with it and mail it to the irs. I hope I make sense you’re a lifesaver thank you!
Yes, you should be able to do that. Definitely send that via certified mail with delivery receipt/tracking.
Hi. Thanks for the video. If I formed my entity (single person LLC) on 1/10/23 but did not receive any revenue or incur expenses until April of 2023, do you think the the IRS will be understanding and allow my late s-corp election status, if I explain I was unsure that I was going to ever have revenue?
Hi Navi. Thanks for your information is really important for us. I have a question. Do i need to do this when i am changing form 1065 LLC Partnership to 1020 S because my partner left? I didn't file anything with IRS, i did with State . Can you help me? Thanks and God bless you
Great video. Well described.
Follow up question - What happens if your late filing is rejected and you don't receive notice until 2023?
If it has been 8-10 weeks, I would call the IRS Business & Specialty Tax Line at 800-829-4933 to see if they can tell you if the election has been accepted. In my experience, this line will only tell you if accepted. They don’t know if it was received, in process, or rejected.
If it is rejected, you can file Form 2553 (late) along with filing your 1120S tax return. You may end up receiving late filing fees for the 1120S if filing after March 15th. If you do, you can ask the IRS to abate the fees if it is a first time offense.
@@NaviMarajCPA Thanks!
Great video thanks for this information- so clear and concise!
I was on my way, finally hired a CPA to file late back to Jan 1 2023- and discovered I failed to file form 568 last year in turbo tax- does that mean I won’t qualify to request late s election for 2023?
I have the same question
Navi, I formed my company 01/12/2023 should I wait until next year now or go ahead and file it ASAP? Also, is there a reason I should elect not to be treated as an s corp until 2024?
Do I wait to hear back from the IRS before starting to pay payroll taxes or do I get that set up immediately?
Navi help us pls! So my friends and I just started a business, we got our first profit for the month june, but we didnt know we had to file an election. We just submitted our form 2553 last friday. They said that it might take a while to get a response from IRS. For the meantime, how do we treat our corporation as, if were not an scorp yet?
Can you also create and back-date an Entity, like a LLC itself?
Navi
What to do if my LLC is 8 years old and I want to change status to S Corp? Is there anything I can do, or do I need to form a new LLC?
Thank you
Anthony
On form 2553. It says when using a PO Box to see Instructions, what are those instructions?
What if you've been filing as an LLC since 2020, can you still make the effective date in 2022? Will they have to go back and audit the years you are claiming you've been operating as an S Corp
3 years later the IRS sent letter that they never received my 5223 form which I faxed 4 days after I incorporated. Thanks Nari
Department of the Treasury Internal Revenue Service Ogden, UT 84201 ? is real ? they missed the full address
what if a signature was missed and sent to the IRS? What do you recommend for next steps?
Is it true that if my filing date for LLC is the 11th of the month, I can backdate it and have LLC/S-corp election for the 1st of the month (so business income that came in the 1st-10th can be counted towards it
our company has been filing as an S Corp but just found out we are really C Corp. What can we do?
What if I formed the LLC May 2024 in Texas, but want to designate it as S-Corp and be taxed as S-Corp for year 2024? I operated as sole proprietor up till May 2024.
How to do I file my taxes I'm a single LLC but opted to use a payroll service to take taxes out and pay it quarterly.
I work a job and own a company, I want my job wages separate than my business, which set up should I use, llc, s-corp or corporation?
Our entity was started last year in June but did not engage in any business. Is it ok to begin election late on this current year or do we turn in for a late election?
Hi @NaviMarajCPA, I have formed my business on March 29th, and trying to file 2553 with effective date as 5/1/2024. Would be stil considered as late filing?
Hey there! Can I use my Registered Agent address when filing for an S-Corp Election?
When filing out form 2553 in Part 1, which address should use my entity’s or my personal address!!??
Can i file form 2253 now for 2022 without 1120s? And file 1120s after 2553 gets accepted? Also i estimate at 50k tax savings are around 3k for 2022 but what are the late fees for not having fotmed the s corp on time? Generally speaking does it still save on taxes witha the late fees at this point?
On letter E: ….that begins on a date other than Jan 1….? So should I write the 2nd of Jan?
If am e-filing the s-corp late along with 1120-S with a professional software, would that waive the wet signature ??
keeping in mind that the entity was formed beginning 2021 and filed schedule C for 2021 and the late election would be starting jan 2022
what's your thoughts??
Thanks for the info
When I do this, I make my clients use a wet signature and scan the Form 2553 and attach as a PDF to the 1120S. I’m not aware of the IRS allowing e-signature for this particular form. Last client I tried an electronic signature on Form 2553 was in 2020 and the IRS rejected it.
@@NaviMarajCPA thanks for the quick reply,
Am a fellow Accountant,
I will do the same since it’s easier to file it with the return,
The problem is that the outcome is not guaranteed that it will be approved,
Whats your experience with approvals when filing with the 1120-S?!
1099-NEC involved to not rolling the dice as you said?
I filled this from. I got approved to be taxed as a S Corporation. I Regret it doing it now because I don’t make a lot of money. Not worth doing it.
Can I regress back to sole prop LLC? What form do I have to fill out? Thanks
Be careful trying to revoke the S election on your own. It can be tricky. Best article I’ve found in this is: www.llcuniversity.com/irs/llc-revoke-s-corp-election/
Does the IRS frown on Electing S-Corp and then revoking it and then electing again? Some years can be bad.
There is unfortunately a waiting period of 5 years before you can elect to be an S-corp again.
How late can an LLC file Form 2553. Established an LLC back in 2018 but never used it until recently
You don’t have to make the S corp election back to day 1 (2018), you can make it effective 01/01/2023 if you want.
"Professional Procrastinator, LLC" 😂😂😂😂😂😂
I have no income from new s corp formed on march 2023 to dec 2023 for s corp and forget to fill 2553 , can I filled late 2553 elected to be s corp 2024 instead ?
I just got a answer, IRS will disregard a corp for 2023 and 1040 filled , since I got no income from March 2023 to Dec 2023, I just need to fill 2553 form to elect for a corp for tax year 2024 .
Is it true you cannot do a late S-Corp election for 2022 taxes if you were a Sole Prop in 2022?
If you didn’t form an LLC or Corporation in 2022 then there would be no entity to elect S Corp status with. Hope that answers your question.
@@NaviMarajCPA That does, thank you. Is there a way to apply/form an entity for previous years? Assuming not, but thought I'd ask. Thank you!
What if you elect S-corp status 8 years late?
Can’t go that far back. The instructions state how many years you can go back. I think it’s 3 years but please reference instructions.
Robin Jantin S did you ever figure out what to do? I filed my LLC 8 years ago as well.
Robin
I filed my LLC 8 yes ago as well. Did you find a resolution or do you need to form a new LLC?
Great video. In Texas I can do election LLC to S corp taxation?
Thanks! Yes, if you have an LLC formed in TX you can elect to have it taxed as an S Corporation. The S Corp election is done at the federal level, there isn't anything to elect with the State of TX.
Great video! Thanks so much for all the helpful info. A couple Questions I was left with were about the shareholders and percentages.. My Husband established a single member LLC in November 2022, he added me as a fellow Manager about a year after he created the entity, in Oct of 2023. He retains 51% and I was given 49%. We submitted new articles of business to the state and updated me as a Manager and Company Agent at the same time. I’m assuming the date this went into effect would be the “Date Acquired”..?.. Wouldn’t it simplify our taxes to just enter 01/01/2024 as “Date Acquired” so it starts the tax year fresh? Or is that illegal?
One other question I had was if you start off as a single member LLC and then add another shareholder later, is there a partnership application that needs to be filed before the S Corp. paperwork can be processed?
😅 thanks for all your help videos! You’re awesome! 🫶🏽
if i started entity in april, can i submit the 2553 and get the SCorp tax election for the rest of the year on my profits?
also, im trying to get my SCorp election, but the IRS is giving the PDF for 2023, i need the 2024!!!
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Great video! Thanks so much for all the helpful info. A couple Questions I was left with were about the shareholders and percentages.. My Husband established a single member LLC in November 2022, he added me as a fellow Manager about a year after he created the entity, in Oct of 2023. He retains 51% and I was given 49%. We submitted new articles of business to the state and updated me as a Manager and Company Agent at the same time. I’m assuming the date this went into effect would be the “Date Acquired”..?.. Wouldn’t it simplify our taxes to just enter 01/01/2024 as “Date Acquired” so it starts the tax year fresh? Or is that illegal?
One other question I had was if you start off as a single member LLC and then add another shareholder later, is there a partnership application that needs to be filed before the S Corp. paperwork can be processed?
😅 thanks for all your help videos! You’re awesome! 🫶🏽