Do I Need to File Form 2553 Every Year? | Legal Tax Advice

  • Post author:
  • Post category:Uncategorised

Do I Need to File Form 2553 Every Year?

Form 2553, also known as the Election by a Small Business Corporation, is used by small businesses to elect to be treated as an S corporation for tax purposes. Once this form is filed and accepted by the Internal Revenue Service (IRS), the business is subject to specific tax rules and benefits. But need file Form 2553 year? Answer no, there certain circumstances which need re-file make changes election.

Circumstances Requiring Re-Filing Form 2553

While need file Form 2553 year, specific situations may need re-file make changes S corporation election. Some these circumstances include:

Circumstance Action Required
Change ownership You may need to file a new Form 2553 if there are significant changes in the ownership of your S corporation.
Failure to meet eligibility requirements If your business no longer meets the eligibility requirements for an S corporation, you will need to revoke your election and file a new Form 2553 if you later become eligible again.
Change tax year If your S corporation`s tax year changes, you will need to file a new Form 2553 to reflect the new tax year.

Case Study: Smith & Co. S Corporation

Smith & Co. filed Form 2553 in 2015 to elect S corporation status for tax purposes. However, in 2018, the company went through a significant change in ownership, with new shareholders joining the corporation. As result, Smith & Co. was required to file a new Form 2553 to reflect the change in ownership and maintain its S corporation status.

While need file Form 2553 year, important aware circumstances may require re-file make changes S corporation election. Staying informed about these requirements can help you avoid potential tax issues and maintain the benefits of S corporation status for your business.


Legal Contract: Form 2553 Filing Requirements

This contract (“Contract”) entered date signing between undersigned parties. The purpose of this Contract is to outline the legal obligations and requirements related to the annual filing of Form 2553, as per the relevant laws and regulations governing the same.

1. Definitions
For the purpose of this Contract, the following definitions shall apply:
1.1 “Form 2553” refers IRS form used eligible corporations elect S corporation status.
1.2 “Annual Filing” refers requirement eligible corporations submit Form 2553 annual basis.
1.3 “Eligible Corporations” refers entities meet criteria outlined Internal Revenue Code electing S corporation status.
1.4 “Applicable Laws” refers relevant provisions Internal Revenue Code applicable statutes, regulations, legal precedents governing filing requirements Form 2553.
2. Annual Filing Requirement
2.1 The Parties acknowledge and agree that Eligible Corporations are required to file Form 2553 on an annual basis, in accordance with the Applicable Laws.
2.2 The Annual Filing requirement for Form 2553 is a legal obligation imposed on Eligible Corporations to maintain their S corporation status and comply with the relevant tax laws.
3. Compliance with Applicable Laws
3.1 The Parties acknowledge and agree to comply with all Applicable Laws governing the Annual Filing requirement for Form 2553.
3.2 Non-compliance with the Annual Filing requirement may result in penalties, sanctions, and loss of S corporation status, as provided for under the Applicable Laws.
4. Legal Consultation
4.1 The Parties acknowledge and agree that this Contract does not constitute legal advice and that they should seek the advice of legal professionals to ensure compliance with the Applicable Laws.
4.2 Each Party shall bear the responsibility for obtaining legal counsel to address any specific questions or concerns regarding the filing requirements for Form 2553.

IN WITNESS WHEREOF, the Parties hereto have executed this Contract as of the date first above written.


Curious about Form 2553? Here are the answers to your burning questions!

Question Answer
1. Do I need to file Form 2553 every year? Yes, as an S corporation, you need to file Form 2553 only once. However, it`s important to keep your S corporation status in good standing by meeting all the IRS requirements and filing your annual tax returns.
2. What are the consequences of not filing Form 2553 every year? Failure to file Form 2553 annually could result in the termination of your S corporation status, leading to potential tax implications and legal issues. It`s crucial to stay on top of your filing obligations to maintain your S corporation status.
3. Can I file Form 2553 late? While the IRS generally requires Form 2553 to be filed within a certain timeframe, they may allow for late filing under certain circumstances. It`s best to consult with a tax professional to determine the best course of action if you`ve missed the deadline.
4. Is there a fee for filing Form 2553 annually? No, there is no specific fee for filing Form 2553 annually. However, there may be other associated costs with maintaining your S corporation status, such as tax preparation fees and potential penalties for late filing.
5. What information do I need to include when filing Form 2553 annually? When filing Form 2553 annually, you will need to provide basic information about your corporation, such as its name, address, and employer identification number. Important ensure accuracy information avoid potential issues IRS.
6. How does filing Form 2553 annually impact my taxes? Filing Form 2553 annually is a necessary step to maintain your S corporation status, which can have significant tax benefits. As an S corporation, you can pass business income, deductions, and credits through to your shareholders, potentially reducing your overall tax liability.
7. Can I revoke my S corporation status if I no longer want to file Form 2553 annually? While it is possible to revoke your S corporation status, it`s important to carefully consider the implications and consult with a tax professional before making this decision. Revocation could have tax and legal consequences that should be thoroughly evaluated.
8. Are there any exceptions to filing Form 2553 annually? There are certain circumstances in which an S corporation may not be required to file Form 2553 annually, such as if the corporation no longer meets the eligibility requirements for S corporation status. However, it`s important to seek guidance from a qualified professional to ensure compliance with IRS regulations.
9. What are the benefits of filing Form 2553 annually? By filing Form 2553 annually and maintaining your S corporation status, you can take advantage of tax benefits and liability protections that are not available to other types of businesses. This can result in significant savings and added security for your business.
10. How ensure miss deadline filing Form 2553 annually? To avoid missing the deadline for filing Form 2553 annually, it`s important to stay organized and keep track of important tax-related dates. Working with a professional tax advisor can also help ensure that you meet all necessary filing requirements in a timely manner.