llc taxed as Scorp

Forum|Forum|4 years ago
September 23, 2021
3 replies
18 views

Married couple client with an LLC, 60/40 ownership of business. They want to elect for Scorp taxation for 2022 TY. I plan to file form 2553? Also, should their W2 wages be 60/40? Thanks!

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IRonMaN

Level 15

Wages should be based on the work they perform, not the percentage of stock that they own.

Slava Ukraini!

BobKamman

Level 15

Complete and file Form 2553:

--No more than 2 months and 15 days after the beginning of the tax year the election is to take effect, or
--At any time during the tax year preceding the tax year it is to take effect.

But there is “relief for late elections.” See the Form 2553 instructions.

TIGTA just issued an interesting report on S Corporation payroll tax avoidance.

https://www.treasury.gov/tigta/auditreports/2021reports/202130042fr.pdf