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!
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
@BobKamman you are right, that is an interesting report. Not one I will be sharing with my SCorp clients.
@taxman40 wrote:
They want to elect for Scorp taxation
Have you advised them of the pros and cons? Have you determined if that is the best option for their situation?
Just because the client says they want to do it, doesn't necessarily mean it is a good idea.
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