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Form 2553 is used by qualifying small business corporations and limited liability companies to make the election prescribed by Sec. 1362. A corporation or other entity eligible to be treated as a corporation files this form to make an election under section 1362 (a) to be an S corporation.
Attach to Form 2553 a statement describing the relevant facts and circumstances and, if applicable, the gross receipts from sales and services necessary to establish a business purpose. See the instructions for details regarding the gross receipts from sales and services.
A corporation or other entity eligible to elect to be treated as a corporation must use Form 2553 to make an election under section 1362 (a) to be an S corporation.
The IRS treats all corporations as C corporations for tax purposes, often leading to double taxation. Filing IRS Form 2553 and making the S corporation election under Section 1362 of the Internal Revenue Code enables you to avoid paying taxes at corporate and shareholder levels.
We’ll walk you through filling out Form 2553, which businesses and other eligible entities use to elect to pay taxes as an S corporation (S-corp). To make this election, you’ll have to fill out a four-page, four-part form.
IRS Form 2553 tells the IRS that your business wants to elect S corporation status for tax purposes. It would otherwise be taxed as a C corporation.
IRS Form 2553, also known as the “Election by a Small Business Corporation”, is the standardized document entrepreneurs must file to make an election to become an s corporation election under section 1362 (a). Submitting this form enables the IRS to formally recognize your S corp status for tax purposes.