Do you run a small business? If yes then you must know the fact that when you decide to register your business as a corporation with the IRS it gets incorporated as a C corporation. Although you always have the option to register as an S corp rather than a C corp. For this, you will have to fill out IRS Form 2553
. Doing so will give you significant tax benefits. This way you will be able to save a good amount from the company funds. At this point you must be having questions in mind like: what is form 2553 IRS
A small business owner needs to fill out the 2553 IRS Form so that it can register as an S corporation instead of as a C corporation. Every business owner wants to register as an S corporation because this provides them a lot of tax benefits. These tax benefits depend on a number of factors. The taxation process of an S corporation is somewhat similar to that of a partnership or limited liability company (LLC), rather than a C corporation. The most common reason small businesses file Form 2553 is for tax purposes.
If you register your business as an S corporation then it will be taxed only once. On the other hand, if it is a C corporation then it can be taxed twice in some specific cases. That means a C corp can be taxed both at the corporate level and the shareholder level if it pays out dividends.
By now you must have understood why the IRS Form 2553
is important. If you fill out this form the IRS will consider your C corporation as an S corporation for tax purposes. And you also get a lot of tax benefits. This also helps you to reduce your tax liability.
If you have some confusion at some point in the process of filling the IRS Form 2553 then you should take help from some expert tax professional. We have a large team of dedicated tax professionals and we are just a call away. You can call us at +1-866-301-2307
We are available 24x7.