USA Filing 2553 for converting to S-Corp

[Nimhakim]

I have a recently formed LLC in California. I want to have it treated as an S-Corp, but it is past the initial 2.5 months for filing the 2553, however, I want to convert for tax year 2016. Do I have to file the 8832 beforehand or can I just file the 2553 in the first 2 months of the year....

Thanks.

 

[Tyson]

I'm not an accountant or tax professional, so take my advice with a grain of salt.

I believe the only way to elect to be taxed as an S-Corporation is to first become a C-Corporation. An LLC is not a corporation and is not recognized by the IRS. If you have not filed anything with the IRS then your company will be treated and taxed as a Sole Proprietorship. To become an S-Corporation you will probably need to first file form 8832 to become a C-Corporation, and then within 2.5 months use form 2553 to elect to be taxed as an S-Corporation.

Your income so far this year will be taxed as a Sole Proprietorship, but the income you make after becoming a corporation will be taxed under the corporation starting on the effective date.

I hope this helps