You can switch your limited liability company’s (LLC) tax status to an S corporation, provided it meets the Internal Revenue Service’s (IRS) requirements. You don’t have to change your business structure, but you’ll need to file a form with the IRS.

Can I change my S Corp back to an LLC?

Most states have an easy process for changing from an S corporation to an LLC. In some states, you must first form your LLC and then merge the S corporation into the existing LLC. This transaction can be complicated. A shareholders’ resolution will need to be passed by the S corporation authorizing the conversion.

What happens if I file my S Corp late?

Penalties for filing late If the corporation files its Form 941 after the deadline and it has an unpaid tax balance, a 5 percent penalty may be assessed on the balance for each month or partial month the tax is late, up to a maximum of 25 percent. Similar penalties apply to filing Form 940 after the due date as well.

How do I waive a late filing penalty for an S Corp?

To get an FTA waiver, a taxpayer must:

1. Have filed all the required returns or at least have filed a valid extension.
2. Not have an open request for a return from the IRS.
3. Have paid or entered an installment plan to pay all taxes due.
4. Have no prior penalties in the last three years except for an estimated tax penalty.

When do I need to change my LLC to a s Corp?

By March 15 of the year you want the election to take effect. Any time during the prior tax year. Newly formed LLCs can file an election for the LLC to be taxed as an S corp. within two months and 15 days of the date the business begins its first tax year.

Can a LLC be taxed as a S corporation?

To be taxed as an S corporation while still being organized as an LLC, an LLC must meet the same requirements as a corporation regarding number and type of owners. The LLC must then file IRS Form 8832, Entity Classification Election.

When to file Form 2553 for a LLC?

The authors recommend that the Form 2553 be filed by the earlier of 75 days or two months and 15 days after the date the S election is to become effective. In this way, the Form 2553 will be filed within both the Form 8832 and Form 2553 filing limits.

Can a late S Corp file a tax return?

Until you receive approval from the IRS, your corporation will not be eligible to file an S-Corp tax return. What Is a Reasonable Cause of Late S-Corp Filing? You will be happy to know that when granting relief, the IRS can be fairly lenient. Upon reviewing court documents and tax journals, certain reasonable causes are nearly always approved.