Where to File Form 2553: The Complete Guide

You’ve decided to take the S-Corp election for your business. You don’t want double taxation and you want to make sure you lower your tax liability while protecting your personal assets. Filing as an LLC or corporation is the best way to protect your personal assets, but the S-Corp will help your tax liability.

To do this, you must file Form 2553, which lets the IRS know you want to elect S-Corp. To file the form, you must know where to send it.

Here are your options.

Filing Form 2553

Once you complete Form 2553, you must mail or fax it to the appropriate place. There are two places you might mail or fax it to – the location you send it to depends on your principal place of business which you can determine here.

Department of the Treasury

Internal Revenue Service

Kansas City, MO  64999

Fax: 855-887-7734

Department of the Treasury

Internal Revenue Service

Ogden, UT  84201

Fax: 855-214-7520

Tips for Filing Form 2553

Before you file Form 2553, here are some helpful tips:

  • You must file the form no later than 2 months and 15 days after the first day of your tax year. If you follow the traditional tax year, this means March 15th. If you operate on a different fiscal year, it’s 2 months and 15 days after the first date of your tax year.
  • If you started your business this year, you have 2 months and 15 days from your first date of business to elect the status this tax year.
  • If you miss the due date, you might be able to elect late if you have ample reason for missing it. The IRS decides this on a case-by-case basis, so check with the IRS to see if they’ll accept your reason.
  • You must have a board of directors appointed and bylaws created that must be registered.
  • You can only sell one class of stock. In other words, you can’t have preferred and common stock. You can only issue one or the other to qualify.
  • You only have to elect the status one time. You don’t have to complete Form 2553 every year.
  • Always make sure you have the most recent version of Form 2553, by clicking here.

S-Corp tax advantages

S-Corps are beneficial for individuals because they do not have to pay Social Security taxes on their dividends. They also avoid paying employment taxes because earnings and profits other than the owner’s salary pass through the corporation.

Because the owner receives a salary from the S-Corp, the income tax rate is lower than that of an employee. A shareholder-employee of an S-Corp may not be taxed on the salary, but he can take appropriate deductions and credits on his taxes each year.

S corporations do not have to pay double taxes, unlike partnerships. The tax rate on profits in an S-corporation is lower than that of a partnership, which means that a business owner will only pay taxes on the amount of profit he/she actually receives. Unlike partnerships, S corporations cannot pass on the profits or losses to its shareholders.

However, the benefits of this structure are not available in every state. For this reason, it is important to do research on the tax laws in your state to ensure that you get the benefits of the S-corporation.

S-corporation is the most common way to structure a business in the United States. However, it is not the best choice for every business. You should carefully consider the pros and cons of S-corps before deciding on which to incorporate.

By choosing the right structure, you can save money on taxes and protect yourself from liability. If you are unsure about whether an S-corporation is the right choice for your company, consult a tax professional for more information.

Final Thoughts

You can mail or fax Form 2553 to the IRS when you elect S-Corp status. If you’re pushing it close to the due date, consider faxing it and printing a confirmation to prove when you sent it. If you mail it, make sure you get it postmarked no later than 2 months and 15 days after the first day of your tax year.

The election may help lower your tax liability while allowing you to have a business structure that protects your personal assets.

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