Today TaxMama hears from Julie in Silicon Valley, CA, who’s concerned, “I’m just launching a new business. After talking to an attorney, I decided I wanted to be an S-corp versus an LLC.
I incorporated on September 2, 2005. When Form 2553 (Election by a Small Business Corporation) arrived for the S-corp election, it stated that unless I filed for an S-corporation election by March 15, 2005 that I would be treated as a C-corporation for 2005 and the election wouldn’t go into effect until January 1, 2006. Is there anything I can do to became an S-corporation this year? I’d really like to deduct my business expenses on my personal tax return and don’t want to be stuck in C-Corporation status this year.
Chuckle, Well, Julie,
Oh, you read that?
Well, Take a deep breath.
Let it out.
It’s OK. Don’t worry. Now, read the instructions again, slowly.
You’ll read that the due date is EITHER March 15th, OR the 15th day of the third month after you incorporate.
So, you incorporated on Sept 2, 2005. That means you have until November 15th to file the Form 2553.
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In fact, if you read the instructions carefully, you’ll find that even if you file the Form 2553 late, you can still get S-corp status as long as you file it with, or before you file your first tax return. The instructions actually tell you how to file it late so IRS will accept it.
See, you have nothing to worry about.
And oh yes, the state! California will accept the IRS filing. For folks in other states, please check your own state’s rules and forms.
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You might need to file an application with your state. If you can’t find the information on your state’s website, just call your department of taxation.
They’ll be able to tell you.
https://www.taxadmin.org/fta/link/forms.html State Taxing Agencies click on your state
And, remember, you’ll find answers about lots of information about donations and other tax issues, free. Where? Where else? At TaxMama.com
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