Can an LLC Elect S-Corporation Taxation?

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Once you’ve established a Limited Liability Company (LLC) in your respective state, you may elect to have your business taxed like an S-Corporation. To do this, you must complete Form 2553, furnished by the Internal Revenue Service (IRS). This election may provide tax-planning benefits to you and your business, and is a worthy consideration for anyone planning to establish an LLC.

For an LLC, electing S-Corporation taxation means the business will be legally identified as an LLC, but will be taxed by the IRS as an S-Corp, which effectively avoids double taxation. Instead, the LLC will have what’s called pass-through taxation; the business’ income is only taxed once as income to the owners.

This type of tax election marries the operation and administrative benefits of an LLC with the financial flexibility of an S-Corporation. It is especially helpful to LLCs that operate high payroll taxes (SECA).

To file form 2553 with the IRS, you will need to check EIN number for your LLC. An Employer Identification Number or EIN is a unique number furnished by the IRS and is used to identify your business and its tax responsibilities.

If you wish to elect S-Corporation taxation for your LLC, you’ll need to apply for an EIN to complete Form 2553.

Apply for a Tax ID Today

A federal EIN application for an LLC is the same application form used by all other types of business entities to acquire this important tax ID.

The easiest way to request an EIN for your LLC is to apply online. Online applications are simple to complete and are usually fulfilled within 24 hours.

Remember, LLC formation is authorized by state statute, and must be registered with the state’s respective Secretary of State before you can elect S-Corporation tax status.

Select Your Entity Type to Apply for a Federal Tax ID Today