how to file irs form 8832 5

How to File IRS Form 8832: C-Corp Election

Contact us at Greenback Expat Tax Services, and one of our customer champions will gladly help. If you need very specific advice on your specific tax situation, you can also click below to get a consultation with one of our expat tax experts. However, in most cases, you can only change your classification once every five years, so you may have to wait. But there are a few exceptions, so consult your accountant to see if you can make a new election before the five years are up. Finally, let’s address some specific Frequently Asked Questions that many LLC owners have on this topic.

What is the Form 8832 filing deadline?

If yes, you can elect to be classified as a partnership or association that is taxable as a corporation. If no, you can elect to be classified as an association taxable as a corporation or you can choose to be disregarded as a separate entity. Many businesses are able to reduce their tax liabilities by using Form 8832 to change their tax election status in the eyes of the IRS. In some cases, there’s even the potential to save thousands of dollars in taxes during the year. However, changing your designation is not as simple as snapping your fingers and that’s why we put together the form 8832 instructions below so you can make an election.

Filing Fees

Here are instructions on how to fill out IRS Form 8832, as well as FAQs to figure out whether how to file irs form 8832 your business is eligible to complete IRS Form 8832. Cassie is a former deputy editor who collaborated with teams around the world while living in the beautiful hills of Kentucky. Focusing on bringing growth to small businesses, she is passionate about economic development and has held positions on the boards of directors of two non-profit organizations seeking to revitalize her former railroad town.

This form is only for businesses that want to change their tax status. Part II is very simple to fill out, as this section is only required for those who have missed the filing deadline. The form provides you with a few lines to provide an explanation for why the classification election was not filed on time, along with signatures from owners, officers, managers, or members of the electing entity. Before filing Form 8832, gather all necessary information to streamline the process.

Tax & Online Software Products

You don't need to include additional documentation beyond the written explanation in most cases. A clear, detailed statement explaining why you missed the deadline is usually sufficient. Just make sure it's signed and dated.The IRS typically takes about days to respond to late Form 8832 elections, though it can vary depending on their current workload. You'll receive a determination letter either accepting or rejecting your request. During this waiting period, it's generally best to proceed as if the election will be approved, but consult with your accountant about how to handle any filing deadlines that might occur during the waiting period. If you don’t attach a copy of Form 8832 to a tax return, it won’t invalidate an otherwise valid election.

FAQs: LLC S-Corp Election and IRS Forms 2553 & 8832

• Working with professionals who offer tax accounting services can simplify the filing process and help ensure the election aligns with your long-term financial strategy.
• However, foreign entities not on this list may elect their classification, influencing their U.S. tax obligations.
• Finally, on lines 9 and 10, provide the name and title of someone the IRS may contact for additional information, as well as their phone number.
• For new LLCs, it’s often best to make the election right from the start to avoid unexpected tax treatments.
• Discover how they compare and why it matters for your financial reporting.

Consult the list on the form’s seventh page for a list of those countries. Finally, on lines 9 and 10, provide the name and title of someone the IRS may contact for additional information, as well as their phone number. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Learn how to efficiently file Form 8832 with our detailed guide, covering qualifications, required info, and submission methods.

Part II: Late Election Relief

Ensure the entity’s tax identification number, usually an Employer Identification Number (EIN), is accurate to avoid delays. For foreign entities, review applicable tax treaties or agreements that could influence classification options under U.S. tax laws. Form 8832 is not used to elect to be taxed as an S corporation (S corp).

Form 8832 Instructions: A Simple Guide

• The default classification dictates how the business is treated and taxed by the IRS, unless it’s changed using Form 8832.
• TurboTax Live Assisted Business is perfect for partnerships, S-corps, LLCs and sole proprietorships.
• Here's an overview of the IRS Form instructions so you know exactly how to change your tax status.
• Under this relief, an eligible entity with a single owner or a multi-member LLC could retroactively apply its preferred tax status.
• If you and your accountant determine that it’s financially advantageous to change your default tax status, filing an 8832 gives you the option of being taxed as a sole proprietor, a partnership, or a C corporation.

Most states now support online filings, which streamline compliance and save time for busy entrepreneurs and nonprofit organizations. All partners within a corporation must be taxed according to the same classification. Businesses that want to be taxed as S-corporations need to fill out IRS Form 2553. The IRS estimates that it takes just 17 minutes to fill out this form, and as you can see from our form instructions, there aren’t too many questions to address. You can only change your tax status every five years, with a few exceptions.

This letter is critical and should be kept on file for audits or tax filings. The effective date specified in the letter must align with the entity’s intended timeline. Update internal accounting systems and notify stakeholders to ensure compliance with the new classification.

C-Corp Tax Classification

There are detailed Form 8832 filing instructions on page 6 of the form. The official 8832 form instructions should clear up any confusion that you may have when filling out the form. The IRS 8832 instructions are very detailed, so they should address any questions that come up while you are completing the paperwork. Once an election is made, you must wait 60 months before making another — unless more than 50% of ownership changes. This setup can reduce the number of 5471s filed — which helps save on accounting costs — but it doesn’t eliminate reporting entirely. Be sure to review Subpart F, GILTI, and other international tax rules before making changes.

She has a degree in finance, as well as a master's degree in journalism and an MBA. Previously, she was a financial analyst and director of finance at public and private companies. Tina's work has appeared in a variety of local and national media outlets.

Form 8832 should be submitted with a copy of your company's federal tax return. Submitting these documents together will ensure that the IRS has all of the applicable information to either grant or deny your request to change your business' status. The process for late election relief is rigorous, requiring you to attach the relief request to Form 8832 and submit it to the IRS with supporting documentation. The IRS reviews your explanation, supporting facts, and consistency of your business actions before approving or denying the relief. Engaging a knowledgeable tax advisor or legal counsel is recommended to improve your chances of a successful late election if necessary.