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How do I file an entity classification election?

To elect Corporation status, the LLC must file IRS Form 8832 — Entity Classification Election. To elect S Corporation status, the LLC must file IRS Form 2553 — Election by a Small Business Corporation.

What does entity classification mean?

Entity classification election. From Wikipedia, the free encyclopedia. For United States income tax purposes, a business entity may elect to be treated either as a corporation or as other than a corporation. This entity classification election is made by filing Internal Revenue Service Form 8832.

What is a domestic eligible entity?

Domestic Entities A domestic entity is one created or organized in the United States or under U.S. or state law. A “domestic eligible entity” is any business entity not required to be a corporation under Proposed Regulation 301.7701-2(b).

What classification is an LLC?

An LLC with 2 or more owners is called a multi-member LLC, and the IRS taxes multi-member LCS like a Partnership. Both Sole Proprietorship and Partnership taxation are pass-through, meaning the business profits, losses, credits, and deductions will flow through to the personal tax return of each member.

What is Form 8832 Entity Classification Election?

Form 8832 is the Entity Classification Election form from the IRS. It is filed to elect a tax status other than the default status for your entity. For example, an LLC can elect to be taxed as a C Corporation.

When should you file Form 8832?

There's no deadline to file Form 8832it can be filed either right when you start your business, or at any point during your business's lifetime. However, the filing date is important. The tax status for the business is effective either: Up to 75 days before filing the form.

What is the difference between IRS Form 8832 and 2553?

Form 8832 vs. So, if your business is structured as a partnership, and you want to elect corporate tax status, you would use Form 8832. Form 2553 is specifically for traditional corporations that want to elect S corporation tax status.

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