How to Change Corporate Tax Filing Status
When you incorporate your business, you have the option of incorporating as a C-Corporation or an S-Corporation. Each type of corporation has its own tax implications. There are some situations where a company that formed as a C-Corporation will change to an S-Corporation. If this is the case, your filing status must be updated with the IRS.
- Visit the IRS website and obtain a copy of Form 2553. This form must be submitted within the first 3 months of incorporation of a C-Corporation, or within the first 3 months of status change from a C-Corporation to an S-Corporation.
- Fill out all of the required information on Form 2553. Mail the form, along with any and all requested documentation, directly to the IRS as instructed on the form.
- Wait to receive notice from the Internal Revenue Service that your request to change your filing status from a C-Corporation to an S-Corporation has been accepted. While waiting to receive a response from the IRS, you should continue with normal business operations.
- If your filing status request is still in process with the IRS, you should not file your taxes. If necessary, request a tax filing extension from the IRS while you await your status change decision.
- Upon receipt of your accepted corporate tax filing status request, you will need to complete your annual tax documentation as normal. Include all profit and income statements. File your annual tax return as a new S-Corporation as per the approval letter that you received from the IRS.