Summary Video
Special Note: Only Real Pen Ink Signatures Allowed
You must print BOTH pages and sign IN PEN on each page. Digital signatures are not allowed. You must use a real pen on a printed form. This is an IRS rule.
At the bottom of the first page, hand write your signature and date IN PEN. In the middle of the second page, in Column K, hand write your signature and date IN PEN.
Also on the second page, write in your Social Security Number in Column M if it is not already entered.
Please note that if your business is registered in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin, the IRS requires your spouse to sign the 2553 as well. We will update the 2553 form for you accordingly if needed.
Overview
Form 2553 is a foundational document for your S Corp.
It tells the IRS you want your LLC to be taxed as an S Corp.
It's the reason you stop reporting your business activity on Schedule C of your 1040 Personal Tax Return and start reporting it on your 1120s Business Tax Return.
Box E on Form 2553 determines the start of your S Corp financial books. Any income and expenses your business generates after the first of the month of the Box E date will be added to your books we create for you. Don't worry if some activity occurred in personal accounts, our experts will help extract this information and put it in your S Corp books. This data is then used to file your 1120s Tax Return.
When the IRS accepts your Form 2553, they will mail a CP 261. Click here to learn more about this confirmation of S Corp election form: https://help.collective.com/en/articles/5702616-s-corp-election-confirmation-irs-form-cp-261
Action
Note that since an ink signature is required, you’ll have to print the form. Here are the steps to filing form 2553:
A pre-filled form 2553 has been saved in your Documents on your Dashboard. Please download and review the document for accuracy. If all the information is correct, please PRINT OUT THE FORM and continue to step 2. If the form is not accurate, please reach out to us by emailing [email protected]
You must print BOTH pages and sign IN PEN on each page. Digital signatures are not allowed. You must use a real pen on a printed form. This is an IRS rule.
At the bottom of the first page, hand write your signature and date IN PEN. In the middle of the second page, in Column K, hand write your signature and date IN PEN.
Also on the second page, write in your Social Security Number in Column M if it is not already entered.
Scan or snap a picture of each page and upload them using the documents upload button found in the Documents section at your Collective dashboard at app.collective.com.
Keep the original signed pages for your records.
Next Steps
Collective will fax your signed form 2553 to the IRS on your behalf. You should receive a confirmation letter in the mail from the IRS in approximately six months.
Once you’ve received your confirmation letter, please scan it and email it to [email protected].
We’ll add your form 2553 confirmation letter to your Collective Dashboard for future reference.
Community Property States require Spouse Signature
Please note that if your business is registered in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin, the IRS requires your spouse to sign the 2553 as well. We will update the 2553 form for you accordingly if needed.
The reason is that as you are in a community property state, one of the rules for a valid 2553 election is that all shareholders must consent in writing. And though under federal law your spouse isn’t a shareholder, community property laws specify that most or all property held in marriage is held jointly. So, though we’ll file with you as the only shareholder on the federal tax return, by getting your spouse to sign we ensure it’s a valid election down the road if the shares are ever understood to be held jointly, under state law.
Example of Unsigned 2553
Example of Correctly Signed 2553
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.