LLC vs SCorp

Forum|Forum|1 year ago
May 22, 2024
3 replies
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I have been filing as a single member LLC since 2011 when I started my business. I just found out I am an S-Corp but I want to remain an LLC. When I called the IRS they said they could only advise I file forms 941 and 940. They also said something about SS4-8832. Now what?

Anonymous_

Employee

How did you not know that you were an S corporation?

Generally, you would have had to file a Form 2553 to make an election to be taxed as an S corporation.

If you are an S corporation, see the IRS link below.

https://www.irs.gov/forms-pubs/revoking-a-subchapter-s-election

ateacton

LLCs are State Organizations.

An S-Corp is a IRS Tax Designation.

Your LLC organization type does not change based on your Tax Designation.

You can be a sole proprietor, a partnership or an S-Corp with an LLC.

As a single member LLC, I believe you are taxed as a Sole proprietor unless you make the S-Corp election as stated by the other member. You have a window to make that election. FYI...I am not a tax accountant.

Mike9241

at the time of formation it would be a single member LLC taxed as a disregarded entity. at that time you would file form 8832 toe elect to have the entity taxed as a corporation and form 2553 to elect to have the corporation taxed as an s-corp.

Anonymous_

Employee

You only have to file one or the other; 8832 for a C corporation or 2553 for an S corporation (no need to file an 8832 and a 2553).

Opus 17

Employee

Without more facts, we can only tell you to see an experienced tax professional.

LLCs are state-level business designations. Each state had different rules on how to form an LLC and what paperwork is required. The IRS does not recognize LLCs as a separate kind of tax entity. If you are a single-member LLC in your state, you file a federal tax return as a sole proprietor on schedule C. If your LLC has more than one member, you file your federal tax return as a partnership.

S-corp is a federally designated type of business with uniform rules across all states. There are specific procedures you must use to create an S-corporation.

There is also a hybrid option--you can have an LLC but choose (elect) to file your tax returns as if you are an S-corp. This requires filing a specific form with the IRS.

So ultimately, your question makes no sense. You can't be an LLC or an S-corp without filing specific paperwork when you create the business. Only you know what you actually did when you started the business.