If you are an LLC intending to be taxed as an S Corp, a Form 2553 application must be filed with the IRS. Filing Form 2553 is one of the most important steps in establishing your business’s S Corp tax status. This form notifies the IRS that you want your LLC to be taxed as an S Corp—a decision that affects how your business income, expenses, and payroll are reported.
The process can feel detailed, but understanding what’s required and how Collective can support you will ensure it goes smoothly. Below, we’ve outlined what Form 2553 does, why it matters, and the exact steps to complete and submit it correctly.
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 1120-S Business Tax Return
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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.
- This data is then used to file your Form 1120-S in your Business Tax Return
Your S election date is effectively the day your business began operating as an S Corp for tax purposes. This date must be after the date your business was officially formed.
- 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.
Action: How to Complete and Submit Form 2553
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.
Here are the steps to filing Form 2553:
- Download and Review: A Form 2553 has been generated with the information you provided and saved in your Documents on your Dashboard. Please download and review the document for accuracy. If the form is not accurate, please message us using the message center in the Dashboard.
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Print and Sign: If all the information is correct, please PRINT OUT THE FORM.
- 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.
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Upload: Scan or snap a clear picture of each page and upload them using the documents upload button found in the Documents section at your Collective dashboard.
- Low resolution scans may be rejected by the IRS.
- Keep Records: 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 3-6 months.
Once you’ve received your confirmation letter, please scan it, upload it to your Collective dashboard and message us to confirm your S Corp election was accepted. We’ll review and store your S Corp confirmation letter in your Collective Dashboard for future reference.
Community Property States
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 (or domestic partner in certain states) to sign your Form 2553, under community property law. We will update Form 2553 accordingly if needed.
In some states, community property laws specify that most or all property held in marriage (or a registered domestic partnership in some states) is held jointly, meaning that your spouse or domestic partner may have ownership in your business under these community property laws. A valid Form 2553 requires that all shareholders (persons who have an ownership interest in the business) must consent in writing to elect S Corp tax status. This means that, in these community property states, your spouse or domestic partner must sign Form 2553.
Frequently Asked Questions (FAQs) about Form 2553
1. How do I sign Form 2553? Can I use an electronic signature like Docusign?
You must print the form and sign in real pen ink. Digital or electronic signatures (like Docusign) are not allowed by the IRS. You must hand sign both pages (the bottom of page one and Column K on page two).
2. The form is asking me for a signed copy. Do I need to fill out the entire form myself?
No, you do not need to fill out the entire form. Collective generates Form 2553 with the required information based on your application. Your only responsibility is to review the form for accuracy, print it, and add your pen signature in the required spots. You may also need to write in your Social Security Number in Column M if it is not already entered.
3. I am having trouble printing the Form 2553. Where can I find it?
Your Form 2553 is saved in the Documents section on your Collective Dashboard. You can download and print the document from there.
4. Collective filed my Form 2553, but the IRS says they never received it. How was it sent?
Collective submits your signed Form 2553 to the IRS by fax. You should receive an official confirmation letter (CP 261) from the IRS within approximately 3-6 months. If you do not receive confirmation within that timeframe, please message us so we can investigate.
5. What if I want to change my S election date?
Collective generally does not offer S election date modifications, as these dates are set based on your business formation and IRS eligibility. However, if you have a unique scenario that you believe warrants an exception, please contact our support team.
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.