Waterford Business Solutions

Tax Form 2553


Tax Form 2553

About Tax Form 2553

What is the 2553 Tax Form for and how do I file it?

Form 2553 is an election to have your business recognized as an S Corporation for tax purposes. This form allows a small business to register as an S Corp rather than a C Corp, and this comes with significant tax benefits that can save your company money during tax season.

2023 Tax Form 2553 FAQ

You can either download and fill out the form below, or you can contact a tax professional to assist you. Unfortunately, most software does not provide the ability to file this form for you.

Who files a 2553 Tax Form?

Corporations, single-member LLCs, and multi-member LLCs, and partnerships can all file Form 2553.


What is the benefit of filing as an S-Corp?

Depending on your entity type depends on your benefit. For example, partnerships and LLCs benefit from the fact that owners’ draws and company profit are not taxed at the self-employed tax rate of 15.3%, providing significant savings at tax time for owners as long as they take a reasonable salary. Likewise, corporations (C-Corps) benefit from becoming taxed as a pass-through entity and avoiding the double taxation that most corporations see, as long as they meet membership requirements.


What are the limitations of S-Corps?

S-Corporations have two major limitations. First, they can only have 100 shareholders, and there are limitations on who can be a shareholder; see below. Second, actively involved members must take a reasonable salary, not just owner’s draws.


Who can be a member of an S-Corp?

S-Corporations have a limitation on the number of members and who can hold membership. Any members in an S-Corp must be US citizens, and furthermore, they must be individuals. Corporations and partnerships are not allowed to have membership in an S-Corp since there could be multiple members in the corporation or partnership.


How do I file a 2553 Tax Form?

We have provided a link with detailed instructions from the IRS to walk you through the proper way to fill out and file the 2553 Tax Form.


When do I have to file Form 2553 by?

S-Corporations are required to file off a calendar tax year, and thus all documents related to them are dictated by the calendar tax year. Form 2553 must be filed by the 15th day of the 3rd month of the corporation’s tax year, ultimately meaning March 15th. You do have the ability to file later, given reasonable circumstances of which you will need to explain when filing.


Can I file a 2553 online?

No! Once filled out, the form must be faxed or mailed in based on the state that you live in. It is listed on the first page of the document below. In addition, we have provided an easily downloadable link to the 2553 Tax Form from the IRS.


What if I still have questions about the 2553?

Reach out! That’s why we are here. To help guide you and teach you the proper accounting methods to apply to your business. 

How To Fill Out Tax Form 2553 Instructions Download Tax Form 2553

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