Where to File 2553 Form in US ?

If you want the tax benefits of an S corporation, you must file IRS Form 2553, “Election by a Small Business Corporation.” This form elects the S corporation tax treatment. Filing this form in the proper manner is crucial to ensure your business receives the preferential tax treatment offered to S corporations.

What is an S Corporation?

An S corporation is a standard corporation that has made a special election with the IRS for pass-through taxation. This means that an S corporation’s business income, losses, deductions, and credits flow through to its shareholders for federal tax purposes. S corporation shareholders report their share of the flow-through items on their personal tax returns, thereby avoiding double taxation (where income is taxed at both the corporate and personal levels).

Eligibility Requirements for Filing Form 2553

To be eligible to file Form 2553, a corporation must meet the following requirements:

• Be a domestic corporation: The corporation must have been formed in the United States.
• Have allowable shareholders: Shareholders can be individuals, certain trusts, and estates. However, partnerships, corporations, and non-resident alien shareholders are not permitted.
• Have no more than 100 shareholders: An S corporation cannot exceed 100 shareholders.
• Have only one class of stock: While an S corporation can have both voting and non-voting shares, it cannot have differing classes of stock that offer variations in distribution rights.
• Obtain shareholder consent: All shareholders must consent in writing to the S corporation election.

Where to File IRS Form 2553

The IRS does not offer electronic filingof Form 2553. You must file a physical form by mail or fax. The address or fax number where you submit the form depends on your corporation’s principal business location. Here’s how to determine the correct filing location:

1. Find your corporation’s principal business, office, or agency on the IRS website:

• Visit the IRS website and search within the “Where to File Addresses for Taxpayers and Tax Professionals Filing Form 2553” .
• This listing will provide the corresponding mailing address or fax number based on your business location.

2. Mail or fax Form 2553 along with shareholder consents

Send the completed Form 2553 and all required shareholder consents to the appropriate address or fax number provided by the IRS.

Note: It is highly advisable to mail your Form 2553 using certified mail with a return receipt requested. This will provide you with proof of the date on which the IRS received your form, which is essential for establishing compliance with filing deadlines.

Timelines for Filing IRS Form 2553

The deadline for filing Form 2553 is strict and you must adhere to it to secure S corporation tax status. The deadlines are as follows:

• Filing for current year status: To elect S corporation status for the current tax year, you must file Form 2553 no later than two months and 15 days after the beginning of the tax year. For example, if your tax year begins on January 1st, you must file by March 16th.
• Filing for next year status: If you file Form 2553 after the two months and 15 day deadline, your S corporation election will generally apply to the following tax year.
• Late election relief: There are limited circumstances where the IRS may grant late election relief if you missed the filing deadline. However, obtaining this relief is not guaranteed. Consult a tax professional if you believe you may qualify for late election relief.

Consequences of Failing to File Form 2553

If you do not file Form 2553 on time or file it incorrectly, your corporation will be taxed as a C corporation. This means double taxation on any business profits – first at the corporate level, then again at the shareholder level upon distribution as dividends.

Completing IRS Form 2553

Form 2553 is relatively straightforward, but careful attention to the instructions is critical. You can find the form and instructions on the IRS website (https://www.irs.gov/forms-pubs/about-form-2553). Here’s a breakdown of the information you’ll need to provide:

Part I: Election Information

• Your corporation’s name, address, and Employer Identification Number (EIN).
• The date on which the corporation was formed.
• The tax year for which the election should take effect.
• Details about the corporation’s stock and shareholders.

Part II: Selection of Fiscal Tax Year (optional)

• If you want your tax year to be something other than a calendar year, you’ll need to complete this section and potentially seek IRS approval.

Part III: Qualified Subchapter S Trust (QSST) Election (optional)

• Select this option if specific trusts are holding shares of the corporation.

Signatures

• All shareholders must sign and date the form. An authorized corporate officer must also sign.

Obtaining an EIN

If your corporation doesn’t have an EIN, you’ll need to obtain one before you file Form 2553. You can apply for an EIN online through the IRS website, by phone, or by completing and submitting Form SS-4. The IRS typically issues EINs quickly upon application.

Additional Considerations

• State Taxes: Filing Form 2553 is for federal tax purposes. You must also determine whether your state recognizes S corporation status or if a separate election is needed.
• Tax Professionals: If you are unfamiliar with the requirements for S corporations or filing Form 2553, consider consulting with a tax attorney or accountant to ensure your business complies with all relevant regulations.

Conclusion

Electing S corporation status can provide significant tax advantages to eligible businesses. By understanding the eligibility requirements, how to properly complete Form 2553, and where to file accordingly, you can ensure that your small business benefits from this special tax treatment.

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