S-Election Application

Automated preparation and filing of your S-election paperwork

What you get with this starter tool:

Some companies - usually corporations - can save on taxes by making what is called an "S-election" with the IRS.

If you have decided to make an S-election for your company, this Starter Tool completely automates the preparation and filing of all necessary paperwork, and all at no extra cost.

Who needs this starter tool:

The S-Election Application Starter Tool is for starters who want to quickly and easily complete the documents necessary to elect S-corporation status for their new corporation (or sometimes, their LLC - although this is less common).

Related resources:

Details about this starter tool:

Cost:

Included

Department:

Money

Company Stage:

Launch

Frequently Asked Questions (3)

Is my company eligible to make an S-election?
Most companies using Startomatic are eligible

There are a number of limitations on S-corporations; for example, they must have no more than 100 shareholders, all of whom must be individuals (i.e., not corporations, LLCs, or other entities), and none of whom may be nonresident aliens.

For more details, or to check to be sure your company will be eligible to make an S-election, visit https://www.irs.gov/instructions/i2553 to review the IRS's Instructions for Form 2553.
When is the deadline to make an S-election?
The deadline for a newly-formed company to make an S-election can vary, but is typically 75 days after the company is formed

You can also make an S-election for a later fiscal year. 

If you need more details, review the "When To Make the Election" section of this IRS website: https://www.irs.gov/instructions/i2553.
What is pass-through taxation?
"Pass-through" taxation means that the company itself pays no federal income tax. Instead, the owners of the company report the company's profits on their personal tax returns and pay the taxes directly.

S-corporations and LLCs (usually) enjoy pass through taxation.

This is in contrast to the typical taxation of a traditional corporation (a so-called "C-corporation"), which pays federal income taxes on its income, and then the shareholders also pay federal tax on distributions received from the corporation (often called "double taxation").

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