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Form Instructions 2553 College Station Texas: What You Should Know
Form 2553 to establish their status as an S Corporation in case one of their companies gets bought by a bigger company and a new federal law is passed about S corporation rights and responsibilities. It also gives a small business a “permanent corporate identity.” Why Should I File Form 2553 When a Small Business May Be Going Solo? Small businesses (with only one person, or less) who are starting a new business may choose to register S corporations as their sole business entity. This eliminates their tax obligation on the money they earn from their business and eliminates their S corporation liability altogether. However, most small businesses need to register to take advantage of these benefits. You have a chance to get a head start. Why Should I FILE Form 2553 When I'm a Corporation Going Solo? When you're a corporation going solo and filing a small business tax return, your LLC or sole proprietorship status is recognized by the IRS as your corporation's business entity. If your company gets acquired by a bigger company, those benefits disappear. You will no longer have a “permanent corporate identity.” It is your job as the sole owner to determine if you will form S corporations or LCS. This is why we say: “As the owner, you must decide how to deal with any issues or challenges that may arise regarding a corporation going solo, or as your sole business entity.” Where You Can File Your Taxes (for Form 2553) — IRS There are several places and mailing addresses for filing a copy of Form 2553 (2022) in the United States for small businesses, such as state or local offices, the IRS offices or the IRS's Taxpayer Assistance Centers (TAC). If you're trying to get around or do not live in the U.S., you can file with Form 1041, and we've done some work with them. Who Must File Form 2553 (2022)? There is no requirement for a small business to file Form 2553, unless the IRS approves the election. However, you must file Form 2553 if you are: Dividing your business profits and electing S Corporations. The IRS does not consider profits made by an LLC or an S corporation to be business profits for purposes of Form 2553 (2022). Entrusting income (interest, dividends, rents, royalties, etc.) from an S corporation to a trustee.
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