Business services
S-Corp Election (Form 2553)
Cut self-employment tax by having your LLC taxed as an S-Corporation.
An S-Corp election lets an LLC or corporation be taxed as an S-Corporation. Owners who work in the business pay themselves a reasonable salary and can take the rest of the profit as distributions, which are not subject to self-employment tax. We prepare IRS Form 2553, collect every owner's consent signature and file it with the IRS for you.
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How it works
Answer a few questions about your company and owners
We prepare Form 2553 and send it for signatures
We file with the IRS and track the acceptance letter
S-Corp election guide: filing IRS Form 2553 for your LLC
An S-Corp is not a type of company you form with the state. It is a tax election. Your LLC stays an LLC under state law, but by filing IRS Form 2553 it asks to be taxed as an S-Corporation. An LLC that files a valid Form 2553 does not also need to file Form 8832.
Why owners elect S-Corp status
By default, an owner's share of an LLC's profit is generally subject to self-employment tax. With an S-Corp election, owners who work in the business pay themselves a reasonable salary through payroll, and the remaining profit can be taken as distributions that are not subject to self-employment tax. Once profits are well above what a reasonable salary would be, the savings can outweigh the added cost of running payroll and filing a separate S-Corp return (Form 1120-S). Speak to a tax professional about your own numbers.
Who can elect S-Corp status
- The company must be a domestic (US) corporation or LLC
- No more than 100 shareholders (members)
- Owners must be individuals, estates or certain trusts and exempt organizations. Partnerships, corporations and nonresident aliens cannot be owners.
- Only one class of stock: every owner must have the same rights to distributions and liquidation proceeds
This means an LLC with a non-US owner cannot be taxed as an S-Corp.
Form 2553 deadline
To take effect for a tax year, Form 2553 must be filed no more than 2 months and 15 days after the beginning of that tax year, or at any time during the year before. For a calendar-year company that wants S-Corp status from 1 January, that means by 15 March. For a new company, the first tax year starts on the earliest date it has owners, acquires assets or begins doing business, so the 2 month 15 day clock starts then.
Missed the deadline?
The IRS offers late election relief under Revenue Procedure 2013-30, generally within 3 years and 75 days of the date the election was meant to take effect, when you have reasonable cause for filing late. The relief statement is written on Form 2553 itself. We check your dates and add the late-election statement when it applies.
After you file
Form 2553 is filed by fax or mail with the IRS service center for your state. The IRS says to expect a response within about 60 days. Acceptance is confirmed by a notice (usually CP261), which you should keep with your company records. Then set up payroll for the owner's salary and plan to file Form 1120-S each year.
Need an EIN first? Every S-Corp election needs one. Get your EIN.
S-Corp Election (Form 2553) — frequently asked questions
Does the IRS charge to file Form 2553?
No. The IRS does not charge a filing fee for Form 2553. Our fee covers preparing the form, collecting signatures, filing it and tracking the IRS acceptance.
When does Form 2553 have to be filed?
To take effect for the current tax year, it must be filed no later than 2 months and 15 days after the start of that tax year — for most companies, by 15 March. A new company has 2 months and 15 days from its formation date. Late elections can often be accepted with a reasonable-cause statement, which we include.
Is an S-Corp right for me?
It usually starts to save money once your business profit is roughly $60,000–$80,000 a year or more, because you will also need to run payroll for your own salary. Below that, the extra costs can outweigh the savings. Speak to your accountant if you are unsure.
Can a non-US resident own an S-Corp?
No. S-Corporation owners must be US citizens or US tax residents. A company with a non-resident owner cannot make or keep an S-Corp election.
How long until the IRS confirms?
The IRS typically sends its acceptance letter (CP261) within about 60 days of filing.
Ready to get started?
Order in about two minutes. Our US filing team takes it from there.
Order S-Corp Election (Form 2553) — $50